Bakken Oil Report - Fall 2013

2013

Fall

Medical facilities strive to meet demand No bust for the oil boom, USGS reports: It’s it’s here to stay What waste?! New solutions to handling Bakken wastewater Oilfield Helping Hands helps oilfield families through personal crises Infrastructure racing to keep up with the oil industry

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FALL 2013 CONTENTS

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba

Message from the Honorable Steve Bullock, Governor of Montana 10

LEDs offer higher performance and cost-effective oilfield illumination 110

Message from Andy Peterson – Greater North Dakota Chamber 14

Haws Corp. introduces the first and only eyewash head designed for the human eye 114

Message from Tim Wigley – Western Energy Alliance 18 What waste?! New solutions to handling Bakken wastewater 22 Bakken answers the naysayers with double & triple recoverable estimates 30 Medical facilities strive to meet demand 34 Plant construction at Dakota Prairie Refining progressing on schedule 40 Infrastructure racing to keep up with the oil industry 44 Hess: driving safety in the Bakken 50 Shale, yes! Demand for Bakken workwear continues to increase 52 Bakken development bolsters Enerplus growth 58 An entrepreneur’s playground: Bakken oil boom 64 USGS Bakken assessment: a closet optimist’s perspective 68 South Dakota oil country: Harding County looks to the future 72 MRC: provides the infrastructure in Bakken shale play 76 Growth spurts – a look back at R&R Contracting’s ability to keep up with changing markets 78 Message from Kirk Bushman, Montana Public Service Commissioner 82 Miller Architects & Builders construct hotels to accommodate oil workers 86 Oilfield Helping Hands helps oilfield families through personal crises 90 Rapid City, Black Hills play major supporting role in energy boom 92

Border States: here for the long haul 116

Publisher

Jason Stefanik

katrina@delcommunications.com

World-class Wanzek Construction at the forefront of technology in the Bakken 126

Katrina A.T. Senyk

Sales Manager

Dayna Oulion

What retirement future will you create with your big oil industry wages? 128

Advertising Account Executives

Mi-T-M Corp.: performance under pressure 130

Gladwyn Nickel

Mic Paterson

Anthony Romeo

Beaver Creek Archaeology – archaeology meets paleontology 134

Colin James Trakalo

Veit provides innovative site-preparation solutions for 85 years 138

Production services provided by:

Creating a culture of safety: Summit Energy 140

S.G. Bennett Marketing Services

www.sgbennett.com Art Director

All fibreglass pipes are created equal…

Or are they? 142

Tap into the future with Dakota Gasification Company 146

Layout / Design

Manger Insurance: insuring the Williston Basin since 1946 148

Kathy Cable

Dana Jensen

Advertising Art

Caitlyn Hawrysh Haier

TouchStar® announces its CrudePac™ EXPRESS Bundled 150

Joel Gunter

Inland Tarp & Liner serves the Bakken, Rockies & U.S. oilfield and shale gas plays 152

© Copyright 2013

Tioga Mega Plaza… ‘Eighth Wonder of North Dakota’! 156 ConleyMax: flameless heating systems for the Bakken 159

Mitchell’s Oil Field Service grows with the communities it serves 165

HR trends and insights: workforce conditions in Canada’s Bakken oil play 108

David Langstaff

KLJ nationally recognized on Top 500 Design Firms list 124

Message by Bob Lake, vice-chairman of the Montana Public Service Commission 98

Business for sale: why a business is not like real estate 106

Managing Editor

Wilco Machine & Fab provides Quickstand silos for proppant, sand or granular material 163

Presto Geosystems: soil containment system reduces maintenance and fill 102

President

MBI Energy Services expands oilfield services to meet demand 120

No bust for the oil boom, USGS reports: It’s here to stay 96

Bakken technology crunch – are you stuck? 100

Canada R3L 0G5

DEL Communications Inc. All rights reserved.The contents of this pub­lica­tion may not be reproduced by any means, in whole or in part, without prior written consent of the publisher­.

While every effort has been made to ensure the accuracy of the information contained in and the reliability of the source, the publisher­in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers.

Sund Manufacturing: complete turnkey services built locally in the Bakken 168

Opinions and recommendations made

MAC, Inc. expands its product line once again! 170

necessarily those of the publisher, its

Norris Production Solutions 172 Oil Lift Technology 173 Index to advertisers 174

by contributors or advertisers are not directors, officers­or employees.

DEL

Communications Inc.

COVER IMAGE A routine inspection of Enerplus production at a multi-well pad in Fort Berthold.

Image courtesy of enerplus.

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BAKKEN OIL REPORT – FALL 2013

PRINTED IN CANADA | 10/2013

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MESSAGE

A message from the Honorable Steve Bullock, Governor of Montana When I wrote about energy last spring, I was a little more than 60 days into my first term as Montana’s Governor and in the midst of a hectic legislative session. I presented my vision for energy development for a state uniquely blessed with an abundance of energy resources—both traditional and renewable. I was very clear that as Governor, I believe we can use Montana’s vast energy resources to create good-paying jobs for Montanans and support for our schools, while safeguarding our quality of life.

I am happy to report that news from the energy front in Montana is good.

Bakken development continues to

forge ahead as Montana oil production was up more than 10 percent in the first quarter of 2013, compared to the same time last year.

It’s well-known that this high level of oil production has been creating major economic opportunities, but has also created community impacts that are straining the ability for some local governments to provide basic services.

My administration is responding to these needs by working to provide critical resources in a number of areas to help communities keep up. We’re making unprecedented investments in eastern Montana, including:

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• Nearly $16 million provided for infrastructure development for eastern Montana through the Treasure State Endowment Program (TSEP); • $22 million in aid for school districts to address the needs of school districts in Montana’s oil and gas counties; • $2 million in restored workforce training funds that were eliminated by the 2011 legislature; and • $5 million available for road construction in communities facing rapid growth.

And it’s nice to see industry rising to the challenge in the Bakken as some big new infrastructure projects have taken place. The recently completed OneOK Bakken natural gas liquids pipeline will bring in an estimated $12 million annually in property taxes.

Denbury Resources and Magellan Petroleum will be using CO2 flooding to stimulate production in the Bell Creek and Poplar Dome fields. Both companies believe that prospects are high for bringing large volumes of oil to the surface. Denbury has built a 232-mile CO2 pipeline, the Greencore line, from Wyoming to the Montana’s Bell Creek field, which has now been filled with a pure stream of CO2 from a gas plant and other sources in the state.

I believe the Keystone XL Pipeline will help lead us to energy independence.

That’s why I wrote President Obama in my first month in office expressing my strong support for the Keystone XL Pipeline project. And just a few weeks later, I wrote another letter to the U.S.

Power

Renewable Energy

Oil & Gas

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MESSAGE

State Department, again expressing my strong support—provided the pipeline is developed as it should be. That means: • Ensuring that Montana’s top industry, production agriculture, as well as our waters and wildlife habitats, will not be adversely affected.

• Taking into account the safety and security of the pipeline, the workers

who will construct it, and the communities it will pass through. An incident like the pipeline breach that spilled over 60 thousand gallons of oil into the Yellowstone River cannot be allowed to happen again.

• And it is imperative that the private property rights of Montana landowners be respected.

This past legislative session, energy issues were front-and-center. I signed bills making it easier to move wide loads on our roads and permit new gravel pits, and temporarily lease water rights—all of which should help our booming oil and gas development and make government more effective. We expanded the scope of our Renewable Portfolio Standard, designed to encourage new renewable power production.

I am excited about growing Montana’s economy by attracting investment that will create jobs and increase our tax base. The Main Street Montana Project (http://www. mainstreetmontanaproject.com/) is crisscrossing the state to hear firsthand ideas to expand economic opportunities. My aim is to develop a bottom-up, self-sustaining blueprint to support the creation, recruitment and retention of Montana jobs. I have put together a top-notch team, co-chaired

by Larry Simkins of the Washington Companies and Bill Johnstone of D.A. Davidson and Co.—private-sector leaders who know what it takes to grow

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of an in-depth, comprehensive and

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discussions are just the beginning collaborative approach to economic and workforce development.

Affordable energy is—and will continue to be—important in driving communities. I am optimistic about Montana’s economic future and energy development is sure to be a key component of my economic development blueprint. I look forward to tackling the challenges we face

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and charting a course to create economically strong and healthy communities in Montana. w

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BAKKEN OIL REPORT – FALL 2013

MESSAGE

By Andy Peterson, President and CEO, Greater North Dakota Chamber

Business and higher education must collaborate to meet workforce demands With the continued expansion of North Dakota’s economy and population, driven in part by the booming oil and gas industry in the Bakken region, the state will need a highly skilled workforce well into the future.

Higher education is a key component in the state’s continued success and expansion. It serves as a key economic driver that helps to meet the workforce, research, and innovation needs of North Dakota’s students and businesses. With the current strength of our state’s economy, now is the time for the business community to step up as leaders in strengthening North Dakota’s higher-education system.

The right place, right from the start It all started in the Williston Basin. When we launched Legacy Oil+Gas in 2009, this was our land of opportunity. The area has delivered on its promise ever since, helping Legacy evolve from an upstart junior to a premier intermediate producer.

Today, we are a company of over 100 people, with a development drilling inventory in excess of 2,000 net locations and 2013 exit production of 21,500 Boe per day. Technology-driven light oil resource plays continue to steer our success, with the Williston Basin as a core operations region.

Our Bakken, Three Forks and conventional assets have driven our strong growth and plays like the Spearfish ensure this pace continues into the future. And with our dedicated people, high quality light oil assets and extensive development inventory, we know we are in the right place for a story that is just beginning.

www.legacyoilandgas.com

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BAKKEN OIL REPORT – FALL 2013

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Businesses looking for a well-trained workforce must help students identify paths to future careers, train workers and prepare people for entrepreneurial pursuits. To do this, businesses need a stronger voice in developing higher-education programming that fits workforce demands. At the same time, North Dakota’s education system needs to transform with a greater focus on scholarships, school funding, career guidance, and curriculum that supports North Dakota’s business needs.

Our state’s colleges and universities must be economic drivers, and this requires North Dakota’s education system to equip students with the knowledge, skills and creativity needed to fuel future success. This means the two groups that benefit the most from higher education—employers and students—need to join the conversation as thought leaders.

Higher education in North Dakota has many bright spots.

Businesses are absorbing students as fast as they can graduate, especially in programs like geology and petroleum engineering.

In addition, the 2013 North Dakota Legislature established a new funding formula based on credit hours completed, allocated $1.5 million for the state’s Operation Intern program, and provided more than $2 million for STEM-related programs.

Work is also being done by the state’s colleges and universities to respond to the growing workforce needs of the oil and gas industry in North Dakota. Schools across the state are developing new programs and expanding existing programs in response to the enormous need for trained workers in the oilfields.

Williston State University, located in the heart of the Bakken activity, created a petroleum production technology program in direct response to the needs of the oil industry, as well as developed a welding and carpentry program in response to the new economy created by the oil boom. In addition, the university houses the TrainND program that trains thousands of individuals each year, most of whom head straight into work in the Bakken.

Bismarck State College, home of the National Energy Center of Excellence, works in partnership with Hess Corporation to provide job-shadowing experience for students earning degrees in petroleum production technology. The school’s relationship with the company was also recently expanded to also include

MESSAGE

additional training of Hess employees at the college.

The University of North Dakota houses the Petroleum Research, Education and Entrepreneurship Center of Excellence and provides students with the opportunity to earn a bachelor of science degree in petroleum engineering while living and working elsewhere. Recently, the Harold

Hamm School of Geology and Geological Engineering was also established at the school through a generous donation from Continental Resources.

North Dakota State University also provides programs in geology and emergency management that prepare students for careers in the oil industry. In addition, many research projects related

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to the oil boom are taking place through the university; these are focused on the impacts of the growing industry on different aspects of a community and how methods of decision-making can help create community development.

But there is more than can be done to strengthen the relationship between industry and higher education in order to meet workforce demands. And this type of focus and cooperation needs to take place across all industries in North Dakota.

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The state’s education system should be working at all levels to develop the workforce of tomorrow. It must begin with quality academic training in K-12 that delivers well-prepared students into higher education. Once there, students need a higher-education system that

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emphasizes research and development and teaches science, technology, engineering, and math skills to support the state’s economic growth. This is the business community’s opportunity to step up and be the leaders in the process to bring about positive change.

To address this, the Greater North Dakota Chamber and its members will pursue enhanced communication with the presidents of the state’s colleges and universities. We will listen to their

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perspectives on how to strengthen our state’s higher-education system. And, we will share with them our ideas on how to prepare students to be a strong workforce for the future.

Good things are happening here, and our growing industries will need more and more workers. Now is the time to strengthen the connection between higher education and business, and you

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MESSAGE

By Tim Wigley, President, Western Energy Alliance

What happens when voters learn the facts about oil, natural gas and hydraulic fracturing ?

Americans everywhere have grown to rely on all the wonderful things energy provides them. From powering our laptops and cell phones to keeping us cool in the summertime, we love what energy does for us. It’s a fact that fossil fuels—our dominant energy supplier— make our lives better.

Unfortunately, too many Americans are unaware of how our energy is produced, and don’t think about how electricity arrived at their light switch or the wall outlet. This disconnect created between producers and consumers has led to a lack of basic information about the risks and benefits of energy production. Broadening that disconnect are false accusations and misleading information about how oil and natural gas is produced. Those with radical views often gain attention through sensational claims and dominate the public dialogue. Admittedly, the oil and natural gas industry needs to do a better job explaining the process and engaging the public.

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BAKKEN OIL REPORT – FALL 2013

Knowing that, the Western Energy Alliance launched a comprehensive public-opinion research study to better understand what Americans voters think about our industry, the products we produce and how we produce them. Our objectives were rather straightforward as we hired a polling firm to survey 1,000 voters to find out what they know about energy development and regulations currently in place to protect their health and safety. With the accusations lobbed at our industry nearly every day, the positive support we found surprised even us.

Eighty-seven percent of voters surveyed said they wanted domestic production to meet our growing energy demands, and more than 78 percent of voters favor increased development of oil and natural gas in the United States, with 63 percent strongly favoring. Only 17 percent of voters oppose increased development of oil and natural gas. And when asked where the priority for energy development should take place, almost

one in four (24 percent) chose federal lands over state or private lands. Voters also believe the right amount, or even too many regulations exist today, and that individual states are best suited to oversee oil and natural gas development.

Given that hydraulic fracturing is at the epicenter of controversy over oil and natural gas development, we devoted nearly half our research toward this critically important industry practice. The data shows that if and when the public understands what industry is doing to protect their safety and the environment, their support for hydraulic fracturing increases dramatically.

For example, when voters learn that in the 20- to 30-year life of an oil and natural gas well, hydraulic fracturing is a carefully regulated process that usually takes only a few days to complete, has been used to safely and effectively extract oil and natural gas since 1947, and that the Environmental Protection Agency (EPA) has never found an incident of water contamination due to the use

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Certified by the Canadian Standards Association (CSA), combustion safety controllers produced by ACL Manufacturing Inc. provide a safe means of automatically lighting and monitoring the pilots and burners in gasfired equipment. Through extensive testing by CSA and proven performance in the field, ACL controllers have gained a reputation for reliance and safety. Quick flame-out response times and automatic shut-down features also guarantee that combustion safety controls systems made by ACL meet and exceed section B149.3 of the CSA code and the US NFPA86.

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MESSAGE

of hydraulic fracturing, their support

independence and support the influx of

benefit us all—energy producers and

increases to 71 percent.

new jobs being created by our industry in

consumers alike.

Despite what the few but very vocal

an otherwise slow economic recovery.

About the Author: Tim Wigley is

critics are saying about the industry, the

We know that increased energy

president of Western Energy Alliance, a

reality is most voters have a favorable

production while protecting the

non-profit trade association representing

opinion of how oil and natural gas

environment is possible—we do it

more than 400 companies engaged in all

is produced in America and are very

every day. But it’s time we start doing a

aspects of environmentally responsible

supportive of increased domestic

better job at sharing that with others.

exploration and production of oil and

energy development. They seek energy

Introducing some facts on our issues will

natural gas in the West. w

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What waste?!

New solutions to handling wastewater in the Bakken

By Rebecca Colnar

If you have a large population, there’s going to be wastewater. When a small community suddenly sees burgeoning growth, wastewater needs to be dealt with quickly and efficiently while adhering to regulations.

“With the increased activity in the Bakken oilfield, and new people moving in, there is a big increase in domestic wastewater,” explains Karl Rockeman, P.E., NPDES program manager, North Dakota Department of Health. “The wastewater our department deals with is what comes from living—bathrooms, showers, cooking and cleaning. Each and every housing development, RV park and apartment complex needs to deal with wastewater.”

Rockeman provides a summary of waste treatment options. “Typically in North Dakota in the past, we used a facultative lagoon system. It’s a good system and is still used by almost all of our cities, but the drawback is that a lagoon system takes up a lot of land.

This was not a problem until recently; however with the price of land, and land availability, our communities in western North Dakota are now looking at other options using mechanical treatments.

The three mechanical treatment options: • Store and haul elsewhere. A good option for many of the small facilities.

But once the area gets to certain size, it doesn’t make sense to haul that much waste, so you need to have to have a place to haul it.

• Treat it and discharge it into surface water. The treatment allows the water to be good enough quality for discharge into a creek or stream.

• Let it infiltrate into the soil, similar to a septic system.

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BAKKEN OIL REPORT – FALL 2013

A new man camp outside of Sidney, Montana has its own wastewater lagoon.

Photo courtesy: Rebecca Colnar.

Housing facilities are developing their own treatment options. The North Dakota Division of Water Quality has responded by developing different permits for mechanical treatment, which has allowed permits to be issued in a timely manner and provides additional protection for an area.

“The most common system is the septic system. They are easy to design and construct. The drawback is you have to have a certain type of soil to be able to do that,” says Rockeman.

“We found that larger facilities are using a system with a holding pond where waste can be discharged into the stream after it’s treated. We certainly have strict requirements for quality and monitoring/reporting. This method is tightly regulated and inspectors regularly check the facilities.”

Rockeman says his department is encouraging cities with wastewater treatment plants to increase their capacity. “That can be the least expensive solution for everyone.

However, sometimes because of location, it might not be possible.

We are suggesting facilities work together—for instance, an apartment complex, an RV park and a small housing development can share wastewater treatment plans. It’s more

efficient to band together and share water treatment sources.”

Some entities are installing their own separate septic systems with a drain field, a cost-effective method for a small venue.

Others, if they have land available, are building facultative lagoons. Lagoons are dependent on weather, though; so if it’s hot and windy, the water will be treated in about three weeks. When it’s cold and rainy, the process takes more time.

Rockeman says mechanical treatment plants condense space and time by using mechanical blowers and other methods.

“Most RV camps have hook-ups, so each camper can tie in to a sewer collection system,” explains Rockeman. “If you look at the facilities, most have lines plumbed in to each individual site.”

He’s quick to point out that the N.D. Department of Health requires several approvals for crew housing facilities. “The designs of the wastewater collection system and clean water system need to be approved before construction, as does the system for treated water disposal, such as a drain field or surface water discharge. The source of drinking water has to be approved, as well, and includes monitoring to make sure there is clean water for people.”

What happens to the sludge? With a typical lagoon, generally it will be 10

to 15 years until the sludge will need to be removed. Mechanical plants have more sludge, which is generally put in a landfill or applied to crop land. Both, however, require a permit through the Environmental Protection Agency in Denver.

Municipal Decisions The city of Dickinson has successfully used lagoons for water treatment for its pre-oil boom residents. However, with the energy boom continuing in western North Dakota, city administrator Shawn

Kessel says Dickinson is currently in the middle of constructing a mechanical treatment plant.

“We started a wastewater treatment master plan in 2009, about the time the oil boom hit, and the recommendation was to move to a rapid infiltration basin system,” notes Kessel. “Modifying our lagoon-based system was going to cost around $12 million and be able to accommodate the wastewater of 26,000 people. A population growth study by North Dakota State University showed our area will reach 50,000 people, so we

went back to the drawing board and planned a mechanical treatment plant.

That’s going to be a $30-million plant, and when all is said and done, we’ll have $40 million in wastewater treatment upgrades.”

Kessel said although the price-tag is high, the new facility will be able to accommodate the increase in population, meet ever-increasing federal regulations and be state-of-the-art. He expects the plant will begin operation in June 2014 and will be running full-speed-ahead by September.

“We will still maintain our lagoon system for peak flows and other reasons, but the actual wastewater treatment will no longer be done in the lagoons,” he says. The good news is there is demand for the treated wastewater: Dakota Prairie Refining west of Dickson will be using the water for industrial purposes, and it will continue to be used by farmers for irrigation.

Treatment Options Barbara Campbell with Double-Tree, Inc., located in Bozeman, Mont., has been in the wastewater treatment business for 35 years. In the Bakken, the DoubleTree, Inc. focus is on the development, construction and operation of wastewater treatment plants that provide for the quality treatment of sewage and the recovery of fresh water for reuse. Onsite treatment of sewage at man camps and other sites in the Bakken eliminates expensive hauling and pressure on community systems. Reuse in the Bakken

Barbara Campbell of Double-Tree, Inc. has been in the wastewater management business for 35 years.

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Double-Tree’s Target Logistics plant near Tioga, N.D. brings a new source of water for oilfield activities and reduces pressure on the fresh water resources.

“We previously only worked with municipal wastewater treatment, but got called into North Dakota a couple of years ago because their sewer systems weren’t able to handle the capacity associated with new growth,” Campbell says. “We met with North Dakota Department of Health officials, including Karl Rockeman, to determine the state’s expectations for wastewater treatment and researched the North Dakota regulations. We built a plant near Tioga to treat wastewater from the Target Logistics Tioga Lodge man camp. We have also revamped the system at Capitol Lodge because it wasn’t meeting expectations.

26

BAKKEN OIL REPORT – FALL 2013

“We work with large mechanical treatment plants,” she goes on to explain.

“Much of the demand for treatment in North Dakota is for smaller volumes and a number of smaller package plants are emerging to meet that need. The primary factor for any wastewater treatment facility is to follow state and federal rules,” Campbell says. “A lot of people not in the sewer business don’t understand that treatment standards have to be met and discharge regulations have to be followed.”

She’s impressed that the State of North Dakota has risen to meet the challenge of growing wastewater concerns. “Lagoon systems are dinosaurs, but they do work.

The state has stepped up its funding to help small communities address their needs, which is quite proactive. A lot of man camps are outside of the reach of

municipal systems, so developers are researching what they can do on site. In selecting a wastewater treatment system for a project, the developer should take into consideration wastewater characteristics, amount of treated water storage required and method of discharge. If the developer is planning to sell treated water for reuse, the developer should be aware of any compatibility issues the buyer may have.”

“You can’t have people without having sewers,” Campbell says. “Sewage treatment is a 24/7 process.”

Another company that has seen an opportunity to manage wastewater is Bakken Sanitation Solutions BioBridge BSS, LLC (BSS). “The challenge in the Bakken area is that municipal systems are exceeding the capacity of how much they can treat and safely discharge into existing waterways,” explains Keith Ehlers, one of the partners in the business.

“Municipalities that want to expand and meet the growing needs for wastewater treatment have encountered some hurdles along the way that have delayed such efforts,” Ehlers says.

“For example, the City of Williston was underway with plans for a large expansion to an existing facility along the river when federal agencies decided it was time to redraw the floodplain maps; this then placed the existing facility within a floodplain and required major adjustments to the expansion design.

However, even when the municipal facilities across western North Dakota are expanded there will still be a major gap between treatment capacity and demand, because there is a huge amount of wastewater generated by the workforce on the jobsites scattered throughout the rural areas outside of city limits.

“In most cases, the city government is focused on satisfying the needs of their constituents within the city limits.

In other words, city governments seem to be considerate to the fact that they should not spend their taxpayers’ money on building an oversized facility and accepting the burden of its operations costs to service the rural areas in the

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A BSS water treatment facility.

BSS partners (left to right): Dawnette Smith, Keith Ehlers, Tim Petz and Ryan Ivy.

county from which no tax revenue is generated. When you combine the temporary uses, such as man camps and RV parks, along with the wastewater generated in the rural areas, there is a lot of wastewater that municipal facilities cannot, or choose not, to treat.”

BioBridge BSS is filling the niche.

They constructed a facility and opened for business in June after developing a mechanical and biomicrobic system to treat wastewater, and have gone through the state process including permitting and zoning use.

“We have the technology and an operating facility to satisfy demand and provide an alternative to the current practice of land application of wastewater,” says Ehlers. “Until now, the options for treating wastewater have been very limited, which has put hauling companies and the regulatory agencies in a tough spot because proper land application is tough to regulate during the summer and in the winter, it is nearly impossible to do and still meet regulatory requirements. Yet that has been the primary solution for the last several years. BSS now has a solution and we are working with regulatory agencies and the hauling companies so that strict enforcement of existing health regulations regarding wastewater disposal can be done without hindering the growth in industry and economy that we are all enjoying.”

“Our new technology uses a biomicrobic, fast-treatment system,” explains Tim Petz, another company partner. “We 28

BAKKEN OIL REPORT – FALL 2013

can treat 80,000 gallons of wastewater per day and recycle it back into the environment. It takes roughly a day to turn sewage into usable water. Our plant reduces the sewage load and eliminates the problem of truckers driving 100 miles away to dispose of sewage. Because there is a shortage of waste-treatment facilities, some pumpers might not be adhering to regulations and that certainly isn’t good for the environment. However, enforcement agencies just can’t fine people if there’s no solution available. We created a plan to accept it, treat it and meeting the health regulation standards to recycle it. Not only does our plant reduce illegal dumping and truck traffic, but it also does it in a cost-effective way.”

Ehlers notes that BSS is working to reach out to the logistical administrators of venues like man camps, RV parks, and the workforces on rigs and pipelines now that they offer a solution for treating wastewater.

The water treated by BSS has several post-treatment uses. After treatment, it goes into a large pond next to the plant where it’s stored, where it can be used as needed. The primary acceptable use is for fracking, where it can be used in

the drilling process and thus relieve the burden on aquifers. It can also be used for dust suppression on roads, and can be sprayed as irrigation on fields used for grazing livestock or farm crops. Last, but not least, the water is clean enough that, with the permits and monitoring already obtained by BSS, it can be discharged into the river.

“At this time, the North Dakota government appears favorable to the energy industry, and we feel we’ve provided a solution to one of the many challenges caused by rapid growth in the Bakken,” says Ehlers. “Our system allows enforcement agencies to impose their regulations for a clean environment while giving places like man camps, RV parks and rigs a place to efficiently and economically take their wastewater—and simultaneously reducing the truck traffic of hauling the wastewater to far-away treatment facilities or random fields.”

When one looks at the reduced truck traffic (the BSS plant is only 13 miles north of Williston), the beneficial water resulting from the treatment and the cost-effectiveness, it’s certainly a win-win for everyone in the Bakken. w

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29

MESSAGE

By Chris Faulkner, President & CEO, Breitling Energy Companies

Bakken answers the naysayers with double and triple recoverable estimates

Breitling’s Pumpkin Ridge drill site in the Bakken/Three Forks play in Mountrail County, North Dakota.

To paraphrase Mark Twain, reports of the Bakken formation’s

oil as the last USGS estimate in 2008 (a total of 7.38 BBO), and

demise have been greatly exaggerated.

three times more natural gas and natural gas liquids than the

Earlier in the year, naysayers were wringing hands and sounding

previous estimate (6.7 trillion cubic feet of natural gas and 0.53

the death knell for the Bakken based on falling rig counts and

billion barrels of natural gas liquids).

wrong assumptions. As noted in the Spring 2013 Bakken Oil

This isn’t the first time the Bakken has outperformed the

Report, well counts were actually on the rise, and the ever-evolving

estimates and projections. In 1995, the USGS estimated 151

science of oil exploration and production was already showing

million barrels of recoverable oil, but adjusted its estimate in 2008,

that the Bakken had more surprises in store for us.

putting the figure at 3.65 billion barrels of oil.

Yet, industry focus shifted away from the Bakken and Eagle

The USGS estimates are on the conservative side, of course.

Ford plays with the astonishing new estimates of 30 BBO in the

Continental has put the number as high as 30 to 35 BBO for

Cline. Remember, though, that the Cline was quiet until recently,

Bakken and Three Forks combined.

when higher oil prices paved the way to serious investment in

Who knows what the next USGS assessment might reveal?

developing the region.

Then, sure enough, the United States Geological Survey (USGS)

Fully Accessing the Bakken Will Take Money, New

issued its latest assessment of the Bakken, and the Bakken’s future

Technology

is looking brighter. According to the USGS April news release, the

Certainly it depends on advancements in drilling technologies

Bakken and Three Forks formations contain twice the recoverable

and techniques. The April USGS assessment was enabled by

30

BAKKEN OIL REPORT – FALL 2013

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increased drilling in the Williston Basin, providing much more data than was previously available to the USGS. With both WTI and Brent prices on the rise, and America’s refining and transportation infrastructure starting to come up to capacity to handle the oil and gas boom, the industry is well-positioned to make the necessary investments in exploration and drilling to develop promising formations like the Bakken and Three Forks.

Higher oil and gas prices will be critical. The shale oil and gas boom that began in 2008 was possible because oil and gas prices were high enough to make the investments necessary for increased production profitable.

Take the western edge of the Bakken, for example. Situated under the Fort Peck Indian Reservation in Montana, where the Bakken is a few thousand feet shallower and is interrupted by the Brockton-Froid Fault, its existing wells have brought up more briny water than oil. Though the Fort Peck tribes are courting oil companies for lucrative leases and hoping that their piece of the Bakken will prove a valuable producer, that region will require considerable investment, and perhaps more advanced technologies, if Fort Peck’s dreams of prosperity and sovereignty are ever to come to fruition.

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BAKKEN OIL REPORT – FALL 2013

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With Fort Peck’s existing wells producing more oil than water, its prospects for serious investment may seem poor, but keep in mind the fact that the Three Forks formation was once thought to be unproductive. The new Three Forks estimates are a direct result of commercial development made possible by advances in fracking, horizontal drilling and micro-seismic imaging.

Economics Favorable for Investments, Advancements Technologies in development and early stages of use now may well hold the keys to further unlocking the treasures within the Bakken. For example, Baker Hughes and Schlumberger have begun using new “super fracking” techniques to create longer, deeper cracks for increased well production. Baker Hughes is also trying to cut the fracking timeline with disintegrating balls in place of the standard plastic balls that can get stuck and cause delays.

New and improving C02 and hydrocarbon techniques are also expected to help address some of the peculiarities of the Bakken.

One such oddity about the Bakken that can cause headaches for operators is the Bakken’s oil-wet rocks, which react differently to conventional fracking techniques. Instead of drawing oil to the well, water injected into oil-wet rock formations can drive the oil away. The EIA is so optimistic about the prospects for C02 in solving this issue that it expects a growing trend toward C02 over the next few decades.

Technical and geological uncertainties may be casting a shadow over the potential of the Bakken in the minds of some of the more pessimistic, but the economics are looking good and history, especially recent history, has shown that where the economics are good, the technological advances will follow.

About the Author: Chris Faulkner is the founder and CEO of Dallas-based Breitling Energy Companies, the holding company of Breitling Oil and Gas and Breitling Royalties, which he also founded and serves as CEO. The companies are in the oil and natural gas exploration, production and investment business. Faulkner’s diverse and extensive background in the oil and gas industry in North America, Europe and the Middle East covers all aspects of oil and gas operations, including project management, production, facilities, drilling and business development. Faulkner serves as an advisor to the ECF Asia Shale Committee and sits on the North Texas Commission Board of Directors. w

Please recycle.

Medical facilities strive to meet demand

By Rebecca Colnar

Exponential growth in the Bakken has not only brought about additional restaurants and housing for the increasing population, but medical facilities have also needed to increase their services. Whether it’s the Mercy Medical Center in Williston, McKenzie County Memorial Hospital and Clinic in Watford City or Sidney Health Center in Sidney, Mont., more oilfield workers mean more people in need of health care.

(In fact, Mercy Medical Center’s tag line is “Your Hospital. Growing to Serve You.”) According to an article in CCNMoney in 2011, the rapid growth of the Bakken had led to “…a surge of accidents and patients putting an incredible strain on the local medical facilities.”

Jump ahead to 2013. It’s true the burgeoning population of oilfield workers have led to a new class of accidents, different even from agricultural mishaps. These accidents can range anywhere from lacerated fingers, smashed toes, trauma from being hurt by a piece of equipment and, of course, vehicle accidents. The huge increase in traffic and large oil trucks versus a passenger car makes for a bad mix on the two-lane highways of the area. In addition to an increase in work and highway accidents, an increase in population leads to more illnesses in general, mental health care and yes, even babies. Mercy Hospital recently added a state-of-the art outpatient birthing center with a family-friendly environment and comfortable rooms.

In January, the Sidney Health Center opened a walk-in clinic to handle the surplus of patients. The Weekday Walk-In Clinic is open four days out of the week with evening hours on Thursdays. The desire to expand the walk-in clinic hours 34

BAKKEN OIL REPORT – FALL 2013

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With volume in the ER nearly doubling over the past few years, we felt it was necessary to expand the walk-in clinic hours to help accommodate those seeking a same-day appointment for non-emergency care. beyond Saturday mornings had been a

“With volume in the ER nearly

goal of the facility for quite some time.

doubling over the past few years, we

Feasibility, designated clinic space and

felt it was necessary to expand the walk-

staffing concerns were among reasons

in clinic hours to help accommodate

for the delay in expanding the service

those seeking a same-day appointment

sooner. The Saturday Walk-In Clinic that

for non-emergency care,” states Rick

is run by a rotating schedule of providers

Haraldson, CEO, Sidney Medical Center.

has remained busy since opening two

Even though cancer is probably not

years ago.

making the top of the list for Bakken

employees coming to the clinic, the Sidney Medical Center recently opened an impressive cancer center, with experts in oncology serving the public—a true boon to the area.

Williston Mayor Ward Koeser is pleased the Mercy Health Care Center has grown to keep up with an increase in patients and population. “Mercy Hospital built a birthing center, a daysurgery center and a new cancer center, which shows they are working toward increasing the numbers of people they can see, in a timely manner for medical care,” says Koeser. “I’m impressed with what’s going on with the medical center. We had about 12,000 people here in 2006. Now we have a service population here of 45,000 and that is expected to grow to 75,000 in 10 years.

There is a real need for medical care and I’m comfortable that our medical community is prepared for the future.”

Medical Facility Challenges One of the challenges hospitals face is recruiting doctors, nurses and staff. As with other service jobs in the Bakken, often the medical community can’t pay the salaries of oilfield work. Housing is tight, so it can be difficult for a doctor or other health care specialist to find adequate housing for his or her family. The only saving grace may be that doctors, nurses and other professionals are trained in their jobs and many find their careers very rewarding. It’s not too likely an orthopedic surgeon is going to suddenly leave to drive an oil tanker.

Talk to the medical community and the greatest challenge, even more so than adding staff, is bad debt.

Many patients who come in for care have no health insurance and no permanent address. The North Dakota Hospital Association notes that between 2011 and 2012, 12 medical facilities in western North Dakota have seen their combined debt rise 46 percent. Often a

36

BAKKEN OIL REPORT – FALL 2013

Since 1977, family owned and operated QMC Hydraulic Cranes of Fountain Valley California has been custom building cranes for well servicing applications worldwide.

Halliburton, Schlumberger and Weatherford are just some of the customers that have reaped the benefits of getting to have a voice in how they wanted their QMC cranes designed. Of special note is one of QMC’s own innovation, the fully integral trailercrane. Now a popular component in coiled tubing equipment “spreads”, this trailer not only supports a 100’ 4-piece boom, but enough deck space to carry the BOP, control cabin, lubricators, and hose reels.

Another innovation driven by a customer’s unique requirements is the 7060R boom truck designed specifically for pump-jack servicing. The boom is of custom design used for lifting gear boxes, concrete pads and other heavy job-site pieces. With its rear mount design, the crane can be positioned closer to the well than the competitor’s center-mount units. Of special note is its 9000 pound payload capacity that is often used for carrying options like custom built tool boxes, a hydraulic powered aircompressor, welder-generator, oxygen/acetylene bottles etc. Previously a separate service truck would be required to take this equipment to the job site.

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patient’s driver’s license doesn’t match where they live. When they walk out of the hospital or clinic, they’re gone. The debt load is huge. To combat this, the Sidney Medical Center and Walk-In Clinic now require payment at the time of service even for co-pays and self-pay.

To meet financial challenges of both the hospital and patients, hospital foundations are stepping up to the plate. In Sidney, the Foundation for Community Care strives to ensure the continuance of quality health care for the region. Established in 1883, the foundation has worked hard to

provide grants for requests such as travel for emergency care and scholarships for people who want to become health care professionals.

“We have seen a real increase in our Angel Fund that goes to oilfieldrelated accidents or car accidents due to the increase in traffic because of the development. Correspondingly, we’ve seen a real increase in generosity in the community,” says Melissa Boyer, fundraising coordinator for the foundation, which is connected to the Sidney Health Care Center.

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BAKKEN OIL REPORT – FALL 2013

Boyer explains that the Foundation for Community Care has an endowment and each year gives five percent of the earnings for grants that come out of the endowment—the rest keeps rolling over to create more wealth. “We don’t just give money to the hospital, but grant it throughout the community such as to DARE, to our pregnancy center and to sporting events that need safety equipment. It’s a community foundation.

We are tied to the hospital in that they provide us a budget, but we have our own board. Whatever money is raised goes directly into the endowment.”

Boyer laments that each year they have grant requests for more than $1 million, but can only give around $230,000.

“However, we’re hoping to raise $30 million in the next 30 years in order to meet all of the need.”

Boyer, who also serves as the director of events for the foundation, says they just finished a very successful golf tournament and are working on their popular wine and food festival in early November.

“Certainly the activity in the Bakken has contributed to our wine and food festival growing every year. We have steadily had an increase in the number of people coming, and have moved it to the Richland County Fairgrounds. We have wineglasses with a commemorative building on them, 30 different food vendors, a live and silent auction and, of course, plenty of good wine,” notes Boyer.

“We get 700 people to the event, which for this area is huge. This is the most anticipated event of the year.”

People working in the Bakken and landowners who may have a little extra cash in their pockets thanks to the oil development on their land are helping make community event fundraising successes. With the drive of the medical communities in the Bakken to treat patients for whatever their ills, be it an accident or illness, and the support to increase facilities when necessary, residents of Sidney, Williston, Dickson and many of the small towns in between can feel confident that they will be able to receive professional medical care for many years to come. w

REPORT

Plant construction at Dakota Prairie Refining progressing on schedule Recruiting and hiring process for 80+ employees starting North Dakota’s entire congressional delegation attended the March 26th groundbreaking where N.D. Governor Jack Dalrymple drove a large piece of earthmoving equipment to symbolically launch plant construction while MDU Resources president and CEO Dave Goodin (left) looks on.

Construction of the first greenfield refinery to be built in the U.S. since 1976 is on track and now moving into the initial employee recruiting and hiring phase. In total, the refinery will require more than 80 full-time personnel, with the largest number of employees to work in operations.

“Our goal will be to hire experienced operators along with new graduates who have an educational background in process plant technology,” says Dave Podratz, Dakota Prairie Refining’s plant manager. “Approximately 40 operators will staff the refinery along with lab technicians, engineers, and administrative staff.”

40

BAKKEN OIL REPORT – FALL 2013

In order to develop a qualified workforce, the refinery is developing a training plan with Bismarck State College. The community college has been designated by the U.S. Department of Energy as a National Power Plant Operations Technology and Education Center and will offer a special refinery operations curriculum featuring computerbased training, facilitated courses, simulated modules, and training materials that have been streamlined to provide an associate level instruction in a reduced timeline.

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Podratz named plant manager at Dakota Prairie Refining In early June, MDU Resources and Calumet announced the selection of Dave Podratz as refinery manager at the Dakota Prairie Refining facility near Dickinson, N.D. Podratz will lead the organizational development, start-up and commissioning process of the refinery.

Since starting in the refining industry in 1980, Podratz has spent time at a number of facilities in the U.S. and abroad, including at his current post as refinery manager at Calumet’s Superior, Wis., facility. Podratz is a native of Wausau, Wis., and a University of Wisconsin graduate with a degree in chemical engineering.

Dakota Prairie Refining is located on a 350-acre plot in Stark County, North Dakota, about four miles southwest of Dickinson.

“This is a great program that will help us maintain a strong pool of qualified employees now and in the future,” Podratz states. “We will start recruiting for many of the operations and maintenance positions later this year, with the hope of having some people on board by January 2014.”

Podratz says that interested applicants should monitor a website location that will post all the refinery positions as they become open. “The site—which is jobs.mdu.com—also has an application feature so interested individuals can apply for a job right on the site,” he explains. The plant is expected to be functional 24 hours per day, with employees working two 12hour shifts.

Dakota Prairie Refining is a joint project between MDU Resources Group and Calumet Specialty Products Partners. Initial discussions to build a refinery began in December 2011, when the partners realized an opportunity coming from an ample supply of high-quality crude oil combined with an underserved diesel market in North Dakota driven by energy and agriculture sectors.

In the months following the initial discussions, a project team comprised of individuals from both MDU Resources and Calumet labored through a myriad of activities including finding an appropriate location for the plant facility. A site four miles southwest of Dickinson, N.D., was selected due to its economical proximity to critical infrastructure such as rail, natural gas and electric services, water, sewer, transportation and other services.

The partners also worked to complete all the financial and operational reviews, along with the engineering studies and preconstruction work. While this work was going on, teams were also preparing for the rigorous environmental permitting process. The application for an air quality permit was submitted 42

BAKKEN OIL REPORT – FALL 2013

to the N.D. Department of Health in mid-October 2012 and was issued in February 2013. During this period, the permit went out for a 30-day public comment period. Region 8 of the Environmental Protection Agency provided review of the draft permit in this time period. Upon meeting all the necessary environmental requirements, MDU Resources and Calumet held a groundbreaking ceremony on March 26th and heavy equipment started groundwork that same day.

Plant construction will take approximately 20 months.

“Assuming no major problems, the plant is projected to begin operating in late 2014,” Podratz says. The total cost of the plant is estimated to be approximately $300 million.

Dakota Prairie Refining will process 20,000 barrels a day of Bakken crude oil delivered principally to the plant by pipeline.

From this input, the plant will produce about one-third distillates, principally diesel (or about 6,000 barrels a day); about one-third naphtha (about 6,000 barrels a day); and about onethird atmospheric bottoms (about 6,000 barrels a day). The plant will also produce a small quantity of natural gas liquids.

Naphtha is used primarily as feedstock for producing high octane gasoline and is also used in the chemical industry for solvents, cleaning products, lighter fluid, fuel for camp stoves, etc. Atmospheric bottoms are used as feedstock for lubricating oils and can also be processed into a premium heavy fuel oil.

The naphtha and atmospheric bottoms will be shipped by rail to other facilities for use or further processing.

The refinery is what is known as a “topping plant” because it strips out the easily refined components, processes them, and ships the remaining components off to other refineries for complete processing. A topping plant is an early-stage refinery that refines only certain petroleum components found in the crude oil. Topping plant facilities are typically smaller than fullscale refineries and are usually located near the primary market for their key product. w

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Infrastructure racing to keep up with oil industry

By Laura Bailey

When a newcomer visits the Williston Basin, the first indicator of North Dakota’s oil boom is not likely to be the drilling platforms popping up on the horizon— it’s the orange cones that seem to sprout from the asphalt like dandelions. Roads are under construction everywhere, and it seems a miracle when a driver makes it more than 30 miles without stopping for flagmen and heavy equipment.

Travel is not bound to get easier anytime soon. This spring, the North Dakota legislature and Governor Jack Dalrymple approved an historic $1.7-billion appropriations package to improve roadways throughout the state.

The state’s infrastructure funding includes $600 million to rebuild and repair state highways, with $228.6 million from the Permanent Oil Tax Trust Fund for state highway projects within the 17 oil and gas producing counties in western North Dakota. Most of the projects will include road overlays to increase loadbearing capacity, widening of roads, and patch and repair work. However, there will also be several complete roadway 44

BAKKEN OIL REPORT – FALL 2013

reconstruction projects, as well. Another $142 million from the Permanent Oil Tax Trust Fund is allocated for reconstruction and repair projects on city, county and township roads within the Bakken.

The short construction season—one of the shortest in the nation—poses a challenge to highway contractors.

“Everything is a high-demand, so contractors are working as quickly as they can and the DOT is working as fast as they can, too,” says Mark Dougherty, membership services director at the Associated General Contractors of North Dakota.

Dougherty has seen an uptick in new members joining the association, and many are out-of-state contractors. As more contractors move into the state, the competition for highway jobs has increased. He’s seeing six or seven qualified contractors bidding on each new job.

Contractors are up against an additional challenge—a workforce shortage, which has been a problem in every sector in North Dakota for several years.

“There’s work out here. If people are looking for work they’ll find it in North Dakota, and to some extent in eastern Montana. There’s still a huge shortage of help on highways, in industry, and housing,” Dougherty states.

Railroad infrastructure construction is also in full-swing. Almost 70 percent of all oil transported in the Bakken is transported by rail, and as the area has expanded, railroad infrastructure needs have grown too.

BNSF Railway plans to invest $220 million in this year in infrastructure in North Dakota. All the projects are aimed at increasing capacity. The funding will improve siding—secondary tracks that run alongside main tracks to help with traffic flow on busy routes—near Minot, Manitou, and Tioga. Tracks near Devil’s Lake will be improved, and new tracks will be laid or tracks will be lengthened in railyards in Mandan, Minot and Williston.

BNSF plans to spend an additional $115 million in Montana, and a good portion of it will be spent enhancing Bakken infrastructure in eastern Montana.

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Construction along the Bakken Pipeline Expansion Project was completed and placed into service in March 2013. The Bakken Pipeline Project consisted of expanding the U.S. portion of the Portal Link (or Line 26) by constructing two new pumping stations and replacing an 11-mile segment of the existing 12-inch-diameter pipeline between Kenaston and Lignite, North Dakota. The replacement section tracks north by northwest around the town of Lignite, North Dakota and generally follows an existing railroad right-of-way. New pump stations were constructed in Kenaston and Lignite, North Dakota. In addition, the project also expanded Enbridge’s existing terminal and station in Berthold, North Dakota. Photo courtesy: Enbridge Pipelines (North Dakota) LLC. Off the main lines, lots of work is being done to build out crude oil facilities, loading facilities and secondary track to connect to Class 1 lines, such as the BNSF lines. There are currently 18 oil-loading facilities in North Dakota, and another five to

WBI Energy completed construction of the Stateline Pipeline in the summer of 2012, connecting the output of two natural gas processing plants to the Northern Border Pipeline and pushing the company’s maximum pipeline capacity over the one billion cubic feet per day mark. Photo courtesy: MDU Resources Group.

10 of those large industry-funded projects are either underway or slated for the coming year, says Reed Reimer, vice-president of R&R Contracting. The company specializes in railroad design, construction, and repair. From design to completion, each project will take eight

to 16 months—and that’s with R&R crews working as fast as they can. Each project will require 25,000 to 40,000 feet of new track.

Over time, the Class 1 railroads have raised expectations, Reimer says.

They no longer want to pick up small

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Bakken by the numbers: New funding for roadways: $1.73 billion

New funding for railways: $220 million

Percentage of oil moved by rail: 68

Miles of pipeline: 15,000

Bay Limited trucks large tanks to a location in the Bakken. Roads are under construction everywhere, and it seems a miracle when a driver makes it more than 30 miles without stopping for flagmen and heavy equipment.

Construction on the Northwest Temporary Truck Bypass in N.D. Photo courtesy: North Dakota Department of Transportation.

BNSF Railway plans to invest $220 million in this year in infrastructure in North Dakota; all the projects are aimed at increasing capacity. Photo courtesy: BNSF Railway.

48

BAKKEN OIL REPORT – FALL 2013

Average number of new miles of pipeline laid each year: 2,000+

Percentage of oil moved by pipeline: 32

loads. They’re expecting to pick up whole units. The change has required the oil industry to build out more sophisticated, larger loading facilities.

“I see railroad construction maintaining at an even trend of steady growth,” Reimer says. “The demand from customers is not waning,” Reimer adds.

“We certainly knew how to build track before; but now, we know how to build track fast,” Reimer says.

Oil that’s not moved by rail is moved by pipelines, and pipeline infrastructure construction is growing fast as well. There are currently some 15,000 miles of pipeline in North Dakota. The pipeline carries not only oil but natural gas, and according to the North Dakota Pipeline Authority, 2,353 miles of track were added in 2011. The figures for 2012 won’t be available until later this year, but Justin Kringstad, director of the North Dakota Pipeline Authority, says it should be about the same if not slightly more.

“We expect very robust pipeline construction over the next several years,” Kringstad states.

Natural gas development is playing a big role in pipeline expansion. Four new natural gas processing plants are expected to be built in the next few years. There are 18 such facilities in use now.

“There’s a tremendous level of activity to get this gas captured and moved to market,” Kringstad says.

Every new mile of track and every new mile of pipeline reduces truck traffic, reduces accidents, limits the need for road construction, and makes the Bakken more efficient.

“As this region matures, things will definitely look different five-, 10 to 15 years into the future than it does today,” Kringstad says. w

Baranko Bros., Inc. began as a partnership in 1967 doing primarily soil conservation work. We expanded into the oilfield in the 1970â&#x20AC;&#x2122;s and were incorporated in 1979. Baranko Bros., Inc. is owned by Emil Baranko who retired in 2000, and his son Glenn. Center CoalThe company is based in Dickinson, North Dakota, with yard and shop facilities in Beulah, Center, and Fairfield, North Dakota. Glenn also owns a coal crushing facility in Center, North Dakota, providing stoker and lump coal to customers throughout North and South Dakota and into Canada. Click on Center Coal Company for more information.

The company continues to expand into all types of earthwork, including: underground, concrete, material hauling, construction of landfill facilities, coal mine ash pits, clay liners, as well as projects involving installation of plastic liners for water or waste containment.

We have successfully completed projects in size from few hundred yards to over a million yards. Clients we have worked for include Amerada Hess, Encore Operating, Headington Oil Company, Burlington Northern Santa Fe, N.D. Public Service Commission, Montana Dakota Utilities, N.D. Department of Transportation, Dakota Gasification Company, Minnkota Power Cooperative, Basic Electric Power Cooperative, Great River Energy, Falkirk Mine, Exxon/Mobil, Conoco/Phillips, U.S. Forest Service, U.S Army Corps of Engineers, and many other clients.

As of April 2003, we became a preferred supplier for Basic Electric Power Cooperative.

We have experienced estimators and job supervisors that can give quotes and perform supervisory duties. We also maintain a regular safety program and employ a full time safety coordinator.

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hess

Driving safety in the Bakken MINOT, N.D. – Hess has a clear and simple safety mandate: Everyone, everywhere, every day… home safe. That’s why the company has taken an active role in addressing traffic safety, a continuing challenge from the oil boom in the North Dakota Bakken.

“Our objectives are to minimize the impacts of traffic and simultaneously increase road safety,” says Steve McNally, general manager for Hess in North Dakota.

As oil and gas production in North Dakota has soared, so too has the number of cars and trucks on the roads. Traffic is a byproduct of rapid growth in oil and gas production.

In the past few years, as the economic benefits of oil production have helped revitalize the state’s economy and reduce unemployment to the lowest level in the nation, Hess has been working on multiple initiatives to reduce serious traffic incidents and road fatalities. “While there is more work to be done, we are getting a much better handle on the traffic situation,” McNally states.

The company is taking a multi-pronged approach to minimize truck traffic, improve safety and upgrade existing infrastructure.

“More people are driving to work in the morning and more trucks are transporting the water, natural gas liquids and oil fuelling the shale energy boom. We know that increased traffic has an impact on entire communities, so we’re working closely with state and local officials to support increased funding for traffic improvements that benefit everyone in the area,” McNally says.

In the 2013 State of the State Address1 earlier this year, North Dakota Governor Jack Dalrymple announced the state will increase spending for state highways, county road systems, township roads, bridges, interchanges and other infrastructure improvements by more than $1 billion in the next two years, boosting the state Department of Transportation’s total budget to $2.7 billion. “The level of activity in our state demands that we keep up with these long-term investments,” Dalrymple stated.

Hess has helped to reduce road congestion by sponsoring commuter car-pool programs and working quickly to build and find alternative methods of transportation to reduce the number of trucks on local roads.

The company transports more of its oil and gas through a network of new pipelines it has constructed throughout North Dakota. The goal is to increase the use of pipelines as well as unit trains from the company’s $50-million Tioga Rail Terminal to reduce reliance on trucking as the primary means of transporting produced oil and gas.

50

BAKKEN OIL REPORT – FALL 2013

Photographic credit: Marc Marriott.

“We also require Hess drivers—employees and direct contractors—to complete rigorous proactive driver training classes,” McNally adds. All drivers are required to attend six hours of classroom instruction and take a one-hour follow-up driving assessment with the instructor.

Amber Gifford, journey management coordinator for Hess in North Dakota, has a background in law enforcement. So she tends to see rules of the road as non-negotiable. Speeding, for example, is not acceptable—”even when overtaking another vehicle” and “even for a few seconds.”

Those are some of the messages Gifford says she expects her students to take away from the proactive driver training.

To make sure everyone uses the skills they learn during the proactive driver training, all Hess vehicles are fitted with GPS technology that allows the company to monitor speed as well as rates of acceleration and braking. That way, if the company finds a driver acting unsafely or doing anything that poses a risk to local communities, it can—and does—take immediate action, McNally explains.

Hess also reviews the safety programs and safety records of their suppliers to ensure that it does business with companies that meet its expectations and share its commitment to safety.

“Creating a safe work environment for our people and for the communities in which we operate is the most important thing the company can do,” McNally concludes.

Footnote: http://governor.nd.gov/events/2013-state-state-address w

1

GLOBAL ENERGY. LOCAL COMMITMENT. The natural oil and gas resources of the Bakken Shale have the potential to transform how North Dakotans live and do business for many years to come. Hess is committed to developing these resources in a way that has a lasting, positive effect on North Dakotaâ&#x20AC;&#x2122;s communities for current and future generations.

Copyright Š 2013 Hess Corporation. All rights reserved.

Shale, yes!

Demand for Bakken workwear continues to increase

By Rebecca Colnar

What is the well-dressed person wearing in the Bakken? Chances are a sturdy coat, jeans, safety boots and a hard hat are what’s de rigeur in the oilfield. Still, there are trends and much of the purchases are weather-dependent. Enough workers need clothes resulting in retail stores, like the Boot Barn at the Prairie Hills Mall in Dickson popping up and others, like the Home of Economy in Williston, are expanding.

“I can’t say how much business has picked up in the last two years because our store has only been here for about two months,” says Carol Magnuson, manager of the Boot Barn in Dickinson.

“It’s a good move for Boot Barn to be here because we are always busy.”

Magnuson explains that the Dickinson Boot Barn carries everything that’s work-related, including hard hats and fireresistant (FR) clothes. They sell plenty of Carhartt clothing along with Wrangler jeans, Rock and Roll jeans and Cinch FR. Living up to its name, the store carries lots of boots.

“I think when we opened we had about 3,500 pairs of boots for purchase, and we’re continuing to keep those shelves stocked,” she explains.

“Even though we’re in the mall, we’re not a mall store. In fact, it’s interesting because one of the differences here is the number of customers during a holiday. I worked retail at a mall for a long time and on the Fourth of July, the mall would be 52

BAKKEN OIL REPORT – FALL 2013

Charlie Mackay, shown here in front of his pay-loader, has been working in the Bakken since January 2012 on a crew that handles dirt work, building pipeline right-of-ways and roads.

Liz Douglas, boot manager for the Home of Economy in Williston, says square-toed safety boots that are waterproof are in demand.

Photo courtesy: Rebecca Colnar.

Photo courtesy: Rebecca Colnar.

The Laundry Scene really slow. But here, because there’s not much else to do, we were very busy,” says Magnuson.

“Because people are paid well here, they not only buy workwear because they need it, but also buy nice western wear because they can; things like cowboy hats, nice shirts and good boots. In addition, we carry women’s wear, so that is additional clientele,” she notes. “Although we have local folks coming in, we see people from all over the country who are in the area to work.”

The Home of Economy in Williston is another store that sells just about everything, including a wide range of workwear. Heidi Wilson is the workwear manager, and says that most guys are looking for coveralls or bib overalls. “We see a lot of people new to the area who need to get clothes so they can do what they do.”

Wilson explains that she’s only been at the Home of Economy since February, although because of her experience in retail sales, the company brought her in as a manager. “We offer Carhartt products at a price that’s usually less than other places, and we have a variety of workwear. We sell a lot of Wrangler jeans as well as Pacific & Maine Spentex FR clothes. Spentex is made for hot weather and keeps you drier. Of course in winter, then we’re selling the insulated bibs and coats.”

Wilson notes that the fire-resistant products are popular since many companies require workers to wear them. “We are getting new styles for the fall, and we’re getting in a lot of new flannel shirt to prepare for winter. In the last few weeks, we’ve seen quite a few women looking for work clothes that will fit. Some women are quite small, and they have trouble finding clothing in their size. We are also seeing FR clothing for women.”

The workwear manager notes that women aren’t necessarily asking for pink or brightly colored clothes. “They want to do their work and not stand out. Basically, they just like the dark blue or tan work clothes.”

Liz Douglas, boot manager for the Home of Economy in Williston, says square-toed safety boots that are waterproof are in demand. “It’s the ‘in’ thing,” she says. “Out here they need a boot that is waterproof and boots that are going to last as long as they can. You don’t want something that will get torn up quickly. There is definitely a high demand for mud boots.”

Douglas explains that what’s becoming more popular than a steel toe is a composite toe. “Its safety rating is the same, but it makes for a lighter-weight boot and won’t hold the cold like steel does,” she says. “However, nobody is making a composite, squaretoed waterproof boot.”

Guys living in man camps, RV parks or hotel rooms and working in the oilfield have plenty of dirty, greasy, dusty clothes. What to do? Some corporate man camps have laundry facilities. Other men have to find time—or someone else—to get the washing done.

“Often I’ll just pile up the laundry and take it home to wash every few weeks,” notes Mackay. “But there are laundry facilities. When I first came out here, there was only one laundromat and they closed at 10 p.m. But now a few others have opened and you can do laundry any time, day or night. Some even offer a service that if you drop off your clothes, they’ll wash and fold them for you.”

Places like Bubba’s Bubbles—which has two coinoperated laundry facilities—has two locations in Williston, and opened Village Laundry, a full-service laundry that will even wash oilfield clothes and gloves.

Just like in the mining camps of the 19th century, women have started businesses as modern-day laundresses. They’ll pick up the laundry, wash it, dry it, fold it and deliver it back to the owner in a timely manner. “It’s really difficult when you leave at 5:30 a.m. and get home at 7 p.m. six days a week, to get your laundry and errands done,” Mackay notes. “I think people offering a service doing errands, like laundry, can do pretty well out here.”

Douglas says safety boots range around $189 to $200, with the cost of the composite being slighter higher.

Not only do you need to buy boots for work, but a boot dryer is also a necessity year-round.

“In the winter your feet will get sweaty and you have to dry the boots every night,” Douglas explains. “In the summer, it’s the same thing; your feet get sweaty from overheating. It’s important to have a boot dryer and good socks. The one thing is you don’t want is a cotton sock; cotton is absorbent and that sock will act like a sponge, sucking in the moisture. Socks are more comfortable with synthetics or wool.”

Douglas strives to help every customer get a boot that’s right for them. “We have a good selection of work boots. I’d say we have 15 different brands of work boots, not counting RedWing.

Western work boots are very popular. We do try hard to stay with American-made boots. We’re expanding the store, so who knows how many boots I can order,” she states.

BAKKEN OIL REPORT – FALL 2013

53

Loree Olsen de is a much-needmonstrates why a laundrom at ed service in th e Bakken.

Christina Chauvin, a native of Louisiana, works for Dual Trucking Inc. selling trucking services. Her boots are her lucky charms and she wears them on every sales call. Photo courtesy: Laura Bailey.

Douglas has been with the Home of Economy for two years. “Sometimes you hear rumors that companies are pulling out of the Bakken; but we have a stream of people looking for clothes. We will get different groups of guys from different oil companies who have vouchers for boots.

I think what happens is someone comes up here, goes through winter and realizes how hard it is. They leave and are replaced by new workers.”

In the Field Charlie Mackay, a rancher from Roscoe, Montana, has been working in the Bakken since January 2012 on a crew that handles dirt work, building pipeline right-of-ways and roads.

“The way you dress really depends on whether you’re working on a rig or not.

We’re not working on rigs, so our clothing is a little different. For this job, we are required to have steel-toed boots, a hard hat for when we’re outside of the truck cab, and shirts and jeans. So far, we’re not required to wear FR clothes, but that could change. FR shirts are expensive, running around $50. In the winter, we bundle up, and wear steel-toed muck boots,” MacKay says. “For me, dressing here is just like being at the ranch. When it’s cold, you throw on layers.”

54

BAKKEN OIL REPORT – FALL 2013

Keeping one’s hands warm and dry is critical to comfort. “Everyone agrees that Kinco leather gloves with linings for winter are best because they can handle the moisture without getting cold. It gets 25 to 30 below here,” Mackay notes. He says the first winter in the Bakken, he showed up wearing his wild rag (or neck scarf).

“They really keep your neck warm. Well, my friend’s wife makes them, so he brought them here and must have sold about 40 or 50 in one winter.”

“The guys who work on the rigs take the brunt of the weather,” Mackay explains.

“This year, the summer hasn’t been too hot, but last year, it was almost 100 degrees every day. In the winter, it’s about 40 degrees colder here than it is in Billings, Mont. The back seat of my truck is nothing but clothes. You never know what will hit.”

MacKay echoes what Douglas said about square-toed work boots being “in.”

“There is a fashion statement to be made in the Bakken,” Mackay chuckles. “Right now the popular style is the safety-toe, squaretoed boots. Everyone tucks in their pants to show off their colored boot tops. There are quite a few of those boots here now. I believe the guys coming up from the south are the ones who brought that style up here.”

Loree Olsen, a master plumber with Mechanical Innovation, has been in the Williston area for a year and half.

Be prepared for the weather.

Especially don’t forget to bring your long-johns.

Her company works on all phases of commercial buildings and multi-family housing. Although her job doesn’t require her to wear steel-toed boots, she needs to wear a hard hat and dress for cold weather when winter hits.

“I do wear my hard hat and work boots year-round (putting a beanie under your hard hat works well to keep your head warm), and we wear safety vests and goggles, but in the summer, I just wear jeans and a T-shirt. However, in the cold months I keep adding layers and am bundled up like the kid in the Christmas story,” laughs Olsen. “We wear a lot of muck boots because our work is all new construction and can be very muddy.”

Although some women might not want to stand out, Olsen doesn’t mind. She often sports a pink hard hat and has pink Carhartt bibs for cold weather. “After 20 years in this business, you have it all. I have every type of bib you can imagine.”

As for the pink bibs, Olsen says she gets a lot of comments when she shows up in them. “Just last week, I ran into a couple of women who wanted to get pink bibs, too,” she says.

Advice for newcomers looking to join the industry? “Be prepared for the weather.

Especially don’t forget to bring your longjohns. You’re going to be wearing those for a long time,” Olsen concludes. w

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Bakken development bolsters Enerplus growth

A routine inspection of Enerplus production at a multi-well pad in Fort Berthold.

Successful development in the Bakken underpins a period of strong growth for Enerplus, an independent North American oil and gas producer with a world-class asset base and a solid 27year history.

With more than 800 employees working at operations across North America, Enerplus sees itself as wellpositioned for success as a growing exploration and production company.

From headquarters in Calgary, Alberta, to the main U.S. office in Denver, Colorado, to field offices across Canada and the U.S., Enerplus’s people bring energy, skills and experience to every facet of its business.

The company is involved in some of the most productive resource plays in North America. A balanced portfolio of oil and gas assets include, in America, crude oil development and production at Fort Berthold, N.D., in Richland County, Mont., and natural gas 58

BAKKEN OIL REPORT – FALL 2013

and gas liquids production from the Marcellus in northeast Pennsylvania.

In Canada, Enerplus assets include crude oil waterfloods in Alberta and Saskatchewan and natural gas and gas liquids production in British Columbia and Alberta. According to the company’s second quarter 2013 results, Enerplus produced more than 90,000 barrels of oil equivalent per day during the quarter.

Enerplus operates under a banner of corporate governance that places a strong emphasis on fiscal responsibility, ethical business conduct and safety and social responsibility. In the U.S., the company contributes to community organizations and campaigns that enhance the lives of its neighbors.

Among its efforts in the U.S., Enerplus contributes to the “Adopt-a-Well” elementary education program at the Mandaree School on the Fort Berthold Reservation in North Dakota; the

annual Mandaree Family Powwow; the Richland County 4-H Fair in Montana; the New Town, N.D. Volunteer Fire Dept.; Rebuilding Together Metro Denver; Colorado Uplift (also in Denver); and a number of college scholarships and internships.

Success in the Bakken As an early player in the Bakken, Enerplus has gained valuable experience drilling and completing oil wells that are both productive and efficient. In 2005, Enerplus acquired acreage in the Elm Coulee field in Richland County, Montana. Over the next five years, Enerplus drilled and completed more than 165 wells in the Bakken-formation development that the company calls its “Sleeping Giant” field. This now mature field includes operation of 200 oil wells and a recently opened field office in Sidney, Mont., where 18 employees work.

Enerplus is a strong, growing North American oil and gas producer with a world-class asset base in key plays like the Bakken and the Marcellus.

We have a 27-year history of success and are well positioned for the future.

We are committed to the responsible development of energy resources that ensure the health and safety of our workers, respects the environment and builds positive, long-term relationships in the community. www.enerplus.com

enerplus

Poster created by Mandaree School student for Enerplus’s Adopt-a-Well elementary education program.

The eighth-grade class of students from Mandaree School was taken for a tour of their “adopted” well during drilling operations in January 2013. The Enerplus Adopt-a-Well elementary education program is a year-long series of classes taught by company personnel on energy and oil development.

In 2010, Enerplus began development on 70,000 net acres it acquired in Fort Berthold and now operates 80 oil wells producing in the Bakken and Three Forks formations.

As the company’s expertise in Bakken and Three Forks well development increased, production has grown with it. Enerplus production in Fort Berthold more than doubled in 2012 and is on track to meet a growth target of 30 percent this year, as well.

Recognizing the opportunity in Fort Berthold, Enerplus has allocated nearly 50 percent of its 2013 capital budget, approximately $342 million, on oil development in the U.S. The company currently has two rigs drilling in Fort Berthold and is

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on track to meet its goal of 18 new wells developed by the end of the year.

To manage its development and production in Fort Berthold, Enerplus opened a field office east of Watford City and has expanded its local employee roster to 18 workers, many of whom are members of the Three Affiliated Tribes.

Supporting the Community Enerplus has established itself in Fort Berthold as a responsible, active member of the community. It contributes to several important community organizations and has been recognized by tribal leadership for its best management practices, support for the community and environmental leadership.

Working with the faculty and school board at Mandaree School in Mandaree, N.D., Enerplus developed its distinctive Adopt-a-Well elementary education program to teach young people about the importance of energy and how an oil well is planned, permitted, drilled, completed and produced. The monthly classes coincided with the start-to-finish development of a new well near the school and included a field trip to observe a drilling rig in action. By the end of the program, the students demonstrated their knowledge of how an oil well

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BAKKEN OIL REPORT – FALL 2013

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Enerplus also provided funding to help the Mandaree School Board renovate an underused building on campus into new housing for teachers.

As in Native American communities across the U.S. and Canada, the annual powwow in Mandaree is an important event that brings together families to celebrate and honor their culture and tradition.

Enerplus has been a lead sponsor of the annual Mandaree Powwow for the past three years and its contributions have helped event organizers attract some of the best dancers and singers from across North America. This year, Enerplusâ&#x20AC;&#x2122;s support for the powwow was recognized when two employees were invited to march in the Grand Entry, a colorful parade of powwow participants and members of the community.

Enerplus recognizes the importance of continued oil and natural gas development in the Bakken, and sees its company values and its responsibility to the communities in which it operates as the best route in getting there. w 62

BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2013

Aerial view of drill rig developing an Enerplus Bakken oil well near Lake Sakakawea in Fort Berthold, N.D. Enerplus now operates 80 oil wells in Fort Berthold.

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An entrepreneur’s playground Bakken oil boom creating much opportunity for many business professionals

By Jillian Mitchell

The vast array of business and trade opportunities associated with the Bakken boom has many entrepreneurs all a-twitter, including executive director Tom Rolfstad of Williston Economic Development.

“It’s a story that everyone is interested in hearing more about,” says Rolfstad of the oil and gas surge. “This is an entrepreneur’s playground and if you have a business or investment interest, you need to be here.”

Recently, the Williston executive director has played an integral role in spreading the good news. This past June, the Montana World Trade Center (WTCA Montana) and the Williston Economic Group partnered to launch a one-day seminar entitled “Tapping Opportunity in the Bakken,” a how-to information session designed to help companies launch successful business efforts in the Bakken region (an area covering Montana, North Dakota, southeast Saskatchewan and southwest Manitoba).

The informational seminar, which includes Rolfstad’s live-streamed presentation, “Live from the Field,” offers much on-the-ground insight to prospective Bakkeneers. The facts alone are enough to make any business owner head to the scene, as Rolfstad insists. Case in point, the Bakken and the associated Three Forks formation covers 14,700 square miles, making it the largest continuous crude oil accumulation in the U.S.; the region currently produces over 715,000 barrels of oil per day (more than Ecuador); daily Bakken oil production has doubled over the last two years from 350,000 barrels to over 715,000 barrels; and, the total oil 64

BAKKEN OIL REPORT – FALL 2013

The reporters for the Bakken Oil Report attended the Tapping Opportunity in the Bakken information session held in Winnipeg, Manitoba this June.

Left to right: Virginie de Visscher, Project Manager, WTC Winnipeg; Mariette Mulaire, President & CEO, WTC Winnipeg; Arnie Sherman, Executive Director, Montana WTC; Ed Wetherbee, Managing Director, Northern Rockies Regional Centre; and Derek Earl, Project Manager, WTC Winnipeg.

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For the past three years, North Dakota’s economy has continued to outpace all other states, the U.S. Bureau of Economic Analysis reports.

The state’s economic growth is reflected in many areas of commerce including agriculture, energy development, manufacturing, construction, transportation and exports.

“Our strong business climate, North Dakota’s skilled and dedicated workforce and the innovation created by the state’s small businesses continue to power our economic growth,” says North Dakota Governor Jack Dalrymple. “Moving forward, we will continue to support economic growth through low taxes, a sensible and effective regulatory environment and a state government that is responsive to the needs of business and job development.”

contained in the Bakken is estimated by some at 24 billion barrels.

“The biggest thing is that there’s great opportunity [in the Bakken and Williston region], but it’s going to take some effort to get into this market. It’s going to take some time,” adds Rolfstad. “There’s the challenge—you have to be willing to roll up your sleeves.”

In concurrence is seminar host and WTCA Montana executive director Arnold Sherman, who declares that the vast area is in need of much attention. Over the next 10 years, there will be a need for 110,000-plus workers—and that’s not including workers required for the Three Forks development situated directly under the Bakken formation.

“If you’re not really close to it, you might not realize the magnitude of it. It’s essentially the largest oil reserve in the world now; it’s the size of the U.K. and France combined—I mean, it’s massive!”

Sherman boasts. “A lot of people were curious about the big picture and what the opportunity is and more specifically, what kinds of products and services the market requires.”

As Sherman continues, employment opportunities are many—in fact, there are 10 job openings for every one worker in the region. Accordingly, the Williston and Bakken regions have the lowest unemployment rates in the U.S., at 3.3 66

BAKKEN OIL REPORT – FALL 2013

percent (not to mention the starting wage on the oilfield is $30 per hour).

Furthermore, over the lifetime of each well, combined salaries will total $2 million.

North Dakota’s economy continues to grow and diversify, supporting new jobs and business opportunities throughout the state, says Jack Dalrymple, Governor of North Dakota.

To date, the seminar has been held in many American cities, including Salt Lake City, Missoula, and Butte, to name a few.

Of course, America’s neighbors to the south and north have also taken interest; the seminar has already been presented in Rapid City, South Dakota and Winnipeg, Manitoba. Future prospective seminars include many more Canadian and American cities, as well as London, England, in the fall.

Among the WTCA’s global network is WTC Winnipeg, which hosted the seminar this past June in their home city. WTC Winnipeg project manager Derek Earl worked with WTC Montana in order to bring the seminar to the 344 hopeful attendees.

“The presentation made a really strong case for companies that want to service the Bakken to have a presence down there,” Earl states. “It outlined specific challenges and bottlenecks facing the region that translate into business opportunities for Manitoban companies.

Former Montana governor Brian Schweitzer spoke to more than 300 people in Winnipeg, stating that, “Over the next 10 years the area is going to need 110,000 more workers—but there is nowhere to put them.”

Indeed, there’s a lot of interest in the area, as reflected in the number of participants at the seminar.”

Geographically, Winnipeg is 18 miles further away from Williston than Billings—a fact easily overlooked because of the U.S.-Canadian border. As Earl explains, Winnipeg has the potential to be a major player in the boom and WTC Winnipeg has, as a result, entered into a partnership with WTC Montana for follow-up sessions.

Former Montana governor Brian Schweitzer also presented to the more than 300 people who attended the symposium in Winnipeg. “Over the next 10 years, the Bakken area is going to need 110,000 more workers,” Schweitzer stated.

As Sherman suggests, “There’s room for everyone in the Bakken.” It is the hope of WTC Montana and the Williston Economic Group that the seminar will bring some much-needed clarity to the Bakken boom for many hopeful entrepreneurs. And so far, it has.

“What we wanted to see happen, happened,” insists Sherman. “[The seminar] was to provide a better understanding of the opportunities and challenges in the region, to see whether company offerings made sense in the Bakken, and thirdly to see if there was a reasonable amount of investment interest, which there is.” w

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USGS Bakken assessment Behind the numbers: A closet optimist’s perspective

In April of this year, the United States Geological Service released its most current assessment of the Bakken and Three Forks formations. The long and short of the analysis was that the total amount of recoverable oil in the Bakken and Three Forks formations is roughly double that of earlier projections for oil, and nearly triple the previous natural gas estimates.

For many, this finding is no surprise as private-sector assessments indicate that even the new numbers released by the USGS are more than likely on the low side of what will eventually be recovered from the Williston Basin. For those who read behind the numbers, however, the assessment included some rather interesting information that may be a window into the real potential of the basin.

For the most part, reading government reports is akin to watching the movie Out of Africa three times back-to-back in a foreign language (unnecessarily long, incredibly boring, and you don’t understand the majority of what is being said).

However, by looking behind the numbers in the 2013 Bakken Assessment, a couple of very interesting points make reading the report worthwhile for anyone interested in the future economic prospects of the region. In the report overview, for example, the USGS lists six reasons for conducting the 2013 assessment—all of which combined paint a far more optimistic future than the one portrayed by the 2008 USGS press release (which, by the way, 68

BAKKEN OIL REPORT – FALL 2013

was 25 times more that the estimate provided in 1995). The actual numbers listed in the report have been reprinted in a wide variety of articles over the past couple of months. But from one perspective, the reasons for doing the report may be even more interesting than the numbers themselves.

In 2013, the USGS was able to view “longer well-production histories” throughout the formations. As any scientist in any field would attest to, a longer data history will almost always produce more accurate numbers. Thus, the USGS logically understood that an assessment at this point in time would rely a bit more on real numbers and a bit less on guesswork. In addition, an increased knowledge of the formations themselves provided an increased level of certainty of agency predictions.

Added to this more accurate base of understanding was five additional years of technological advancement capable of greatly increasing recoverability rates throughout the basin. Overall, the USGS 2013 assessment of the Bakken was a positive picture of long-term potential and an exceptional economic outlook for the region.

Despite the fact that current USGS estimates are double those of earlier projections, it still falls well short of independent assessments of the Bakken potential. Although the independent assessments, like the USGS reports, are subject to a variety of shortcomings, the companies that perform them are trained and paid to make accurate determinations

of the real potential of a formation.

With that in mind, some independent assessments have published estimates of recoverable oil in the Bakken and associated formations to be north of 30 billion barrels. Even if no one can precisely predict just how much oil, gas and gas liquids are recoverable from the Williston Basin, the fact remains that for the foreseeable future, economic growth in the region will continue to escalate at an unprecedented rate.

For the companies that are currently in the production or direct support end of the energy business, however, the USGS report did not add much to what is already known and widely accepted. So why is it important to write an article embracing the base elements of the report? Because during the same time-frame that this report was released, several other articles were released that paint an entirely different picture. For example, Forbes released an article on the 13th of June of this year explaining why America’s shale oil boom is actually a short-term proposition. In fact, in the world of energy prognostication, the future is anything but peaches and cream. According to the Forbes article, economic “malaise” will spell the end of American shale oil. Still others in this camp accept the assertion that shale oil will continue to be listed long-term as an unconventional fuel source with little political, economic, or ideological viability. Yet, those who continue to advance this dim view of the U.S. energy future do so based on

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indicators that ignore the big picture perspective. To this crowd, the Bakken is little more than a passing boom, with an impending bust just around the preverbal corner.

Even so, the truth revealed in the USGS report is that the corner is not as close as some may think. And since it is always easier to move the tracks before the train is sitting on top of you, there is still time to take action. The question becomes, do we buckle up for the ride or chart a new course into the future? If, as a nation, we choose to believe that the Bakken is only a boom, then even history will not tell us how many barrels of oil were actually held within layers of the Bakken shale.

Thus the incontestable significance of the 2013 USGS assessment is not found as much in the numbers as it is

in the hope it provides for the potential of a prosperous energy future. The fact is that the Bakken will remain a significant source of energy for decades to come if, as a region, we champion energy as an economic driver rather than a victim of a weak economy. If we find ways to streamline operational logistics, leverage economies of scale, and rigorously facilitate advances in technology, the Bakken opportunity will prove to be even greater than the 2013 predictions.

The USGS Bakken report may not tell the whole story, but it is a window to the future if we are willing to explore the implications to what lies beyond the numbers in the immediate hereand-now. One thing that the USGS Bakken report did not discuss, for example (and rightfully so), is that

(according to the U.N. News Center) the global population is headed to 9.6 billion by the year 2050. More than half of that growth will be in underdeveloped nations. In addition, over two-thirds of the world’s current population centers are scrambling to modernize at an unprecedented pace.

Yet working alone, local, state and national governments are powerless to meet the growing demand for infrastructure, a greater level of subsistence needs, necessary public services, technological advances and the energy to make it all happen.

As a result, the private sector must take steps now to prepare for an unprecedented influx of people, industry, and urbanization. It is imperative, therefore, that all sectors of community and industry come together in a collaborative effort for the mutual benefit of both (paraphrased from the “United Nations Development Program,” n.d.).

The USGS Bakken Assessment may

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not tell the whole story, but the whole story remains unwritten. The part of the story it does reveal is of billions of barrels of oil and an excellent rationale for continued development in the region. Perhaps the greatest take-away from the report, however, is not its recognized increase in barrels of oil; but rather in the question that the report leaves unanswered.

What will this region and this nation do with this extraordinary opportunity?

Will we listen to the ruminations of ruin; or will we rise to the challenge and create a common vision that leverages this opportunity in a manner that prospers both the energy industry and communities for generations to come? w

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BAKKEN OIL REPORT – FALL 2013

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South Dakota oil country: Harding County looks to the future

By Sid Pranke

Buffalo, S.D. — Western North Dakotans used to living with an oil boom might not be overly impressed with the oil activity in Harding County, but it’s the biggest thing South Dakota has going right now, and Buffalo is thriving because of it.

All of Harding County, located on the North Dakota-South Dakota border about two hours south of Belfield, N.D. on Highway 85, has been impacted by much heavier traffic since the Bakken boom, a reality county officials have faced by asking for an increased highway patrol presence in the area.

Heading down one of the main drags in Buffalo, you’ll come across Saloon No. 3, where many a mineral rights land agreement has been crafted between local property owners and oil speculators.

On a recent Friday afternoon inside the saloon, a land man was in the middle of his pitch to a group of older men and women who were in the market to lease their mineral rights.

With his maps spread across the table, the pitch man predicted each family member would receive $4,000 a month in royalties, if all went as planned. “So it wouldn’t be millions—not a gusher,” he said. “Well, that still sounds pretty good,” responded one of the land owners. There was plenty of back-and-forth going on, but no word if a deal got sealed that day.

Mineral rights leasing is still a big topic of conversation around Buffalo, even though oil production has been going on in Harding County since the ’50s; sellers go so far as placing ads on eBay. About a year ago, Texas-based Bedrock Oil and Gas bought about 500 square miles (67,000 acres) of leases auctioned off by the South Dakota Office of School and Public Lands, which handles leases and sales for public land; another 200-plus square miles of school and public land in northwest South Dakota counties have been leased out in 2012.

The No. 3 Saloon in Buffalo, S.D. is a popular place for crafting mineral rights deals.

“What happens a lot of times is, an oil company will lease up a whole big area and then they’ll lease them out to other energy companies. So Bedrock Oil and Gas bought up all these minerals, but they may turn around and farm them out to somebody else; who knows who?” says Harding County commissioner Bob Johnson.

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BAKKEN OIL REPORT – FALL 2013

Johnson says mineral rights leases being sold in Harding County involve both public and private lands, and that leases generally run from three to five years. The money sellers make depends on the deal they make, for both the acreage involved and the royalties for actual oil production.

“It’s just all over the place. I heard some getting $100, others get $50 an acre. And I’ve heard $15 an acre—that’s awfully low,” Johnson says. Royalties can range from 12 to 18 percent: “A lot depends on where you’re at—if you’re in an area where they’re drilling wells, you’ll get more.”

Just two miles north of town is South Cave Hills Road. Head west and traverse down a scenic winding road about seven miles; you’ll reach Continental Resources’ offices.

Along the way, there are cattle grazing out on the range adjacent to commanding buttes; in the whole mix are the steady movements of oil well pumping units dotting the landscape.

And while the oil business isn’t booming in Buffalo, the town has a nice, reliable industry that has brought back the community’s young people to claim the higher-paying jobs the oilfield has created.

Kathy Glines, Harding County’s auditor since 1990, says between the two biggest oil companies in the area, Continental Resources and Luff Exploration, along with several roustabout and electrical companies, significant employment opportunities have been created.

“Any time you get young people back to your community, it’s always a good thing. It lets us old people rest,” she laughs. “You get that vested interest. They care about the community, because they grew up here.”

Harding County has about 200 oil producing wells right now, and has been averaging one to two rigs a month. Almost all the oil wells in Harding County are horizontally drilled in the Red River formation, but there is no hydraulic fracturing (fracking) involved as there is in the Bakken formation up in North Dakota, Glines says. “The oil companies started the secondary recovery with horizontal drilling in the early 2000s,” she says. “We had a lot of activity then, because they were re-entering the wells.”

According to South Dakota Geological Survey databases, an oil well in South Dakota uses 15,000 gallons of water, compared

The No. 3 Saloon in Buffalo, S.D. is a popular place for crafting mineral rights deals. Photo courtesy: No. 3 Saloon & Grill (www.number3saloon.com). with one to three million gallons of water to frack a North Dakotan well.

From all its oil activity, the county has been receiving between $2 million to $3 million in severance taxes for each of the past several years, Glines states. South Dakota’s 4.5 percent severance tax is a production tax, of which 50 percent goes back to the county in which the oil is produced. Severance tax revenue only can be used for roads, bridges and education, Glines explains, a state law that dates back to the ’70s.

Buffalo built a school with some of that money, and with younger families coming back to town, the building will be able to handle increasing enrollment that is expected as more children reach school age, Glines says.

She says Harding County also uses the money to offset the oil industry’s impact on its county road system, with a total annual road budget of more than $4 million. “Some years you’re ahead, some years you’re behind. The weather and everything else factors in,” as well as the oil impact, she says.

Planning and zoning has been a part of the Harding County modus operandi since the ’70s, and now the rest of South Dakota is seeing the advantage in beefing up its planning process for any oilfield impacts, as well.

South Dakota Governor Dennis Daugaard’s office released a 91-page “Oil & Gas Development/Preparedness” report in September 2012, and Glines says part of the planning is due to watching what has been going on in western North Dakota.

“I think a lot of people have this panicked vision that any of our communities could turn into a Williston … which I personally

don’t see happening, unless there’s a lot more technical advances in the drilling process,” she says. “I mean, they’re trying to learn from the—I don’t want to say mistakes, but by what those

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73

communities (Williston and Dickinson)

The visit provided S.D. legislators with the

type of industries in South Dakota that

have learned to be better prepared.”

opportunity to network with oil company

could help the oil boom.”

Buffalo and other South Dakota

representatives and others to spur

Manufactured housing is one of those

communities want to exercise more

business ideas.

industries. While in North Dakota, Solum

control over any growth in their area,

One of those ideas presented to the

says he and his group spent the evening

Glines states. “Of course, a lot of the

S.D. legislators was to start producing

at a crew camp, a facility “that was

communities up there (in western North

sand for hydraulic fracturing.

manufactured by Superior Homes right in

Dakota) did plan for it; they just didn’t

“They (the N.D. Petroleum Council)

Watertown, S.D.,” where Solum lives.

plan for the magnitude.”

had suggested maybe rather than import

Solum says South Dakota’s approach

South Dakota Rep. Roger Solum

from Wisconsin or wherever they get it

to developing products and services

(R-Watertown) was among the South

from, maybe we can find some closer

for North Dakota’s oil industry is “What

Dakota legislators who visited the

sources that would have type of sand that

more can we help you with? Help us help

North Dakota Petroleum Council annual

they use in their (fracking) operations,”

you,” adding that the N.D. Petroleum

meeting in Medora in September 2012.

Solum says. “We just need to find those

Council has encouraged the southern neighboring state “to dive right in.”

Solum says the South Dakota panel likely will propose legislation higher bond requirements for oil drillers, mediation

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services for landowners and developers, a provision that would allow counties to set up trust funds for unindentified mineral rights owners and legislation related to state highway safety and law enforcement.

Though South Dakota’s oil industry is a

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fraction of North Dakota’s, there doesn’t appear to be any sort of rivalry going on, as is the myth dating back to which state was admitted first to the Union.

Glines puts it this way: “I don’t see as much of a rivalry between North Dakota and South Dakota, as I do between East River and West River in either state. I know in North Dakota it’s the same

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thing—there’s that issue of ‘Should

150

the money go West River or should

145

the money go East River?’” Glines says

140

she sees other similarities between the

135

western halves of each state.

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BAKKEN OIL REPORT – FALL 2013

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“Looking back on our 92-year history, we have built a thriving and innovative global distribution company on the solid foundation of customer service, quality products and companywide dependability developed by our founders,” states MRC chairman, president and CEO Andrew Lane. “What a powerful legacy and exciting future.”

Growing to Serve the Midstream “The robust activity in the North American shale plays and Canadian oilsands is a key driver of our growth in the midstream sector,” says Jim Underhill, MRC executive VP and COO – U.S. Because of this growth, MRC has committed extensive inventory of bare and coated pipe, high-yield fittings, ball valves, actuators and other pipeline products to meet immediate customer requirements in these key regions.

However, the company is investing in more than just inventory to support their customers.

The company maintains an extensive distribution footprint is constantly strategically expanding to stay ahead of their customers’ needs. In 2012, MRC established a new 80,000-squarefoot (7,432-square-meter) regional distribution center, which includes 4,000 square feet (371.6 square meters) 76

BAKKEN OIL REPORT – FALL 2013

of valve automation shop space, in Cheyenne, Wyo. at the heart of the Niobrara shale play and to support the Bakken shale play.

This year, MRC is also expanding its Edmonton, Alberta operations to include an additional 5,575 square meters of warehouse space. The larger location will support the robust capital projects activity in both the Canadian oilsands and the Canadian portion of the Bakken shale play.

“We are intensely focused on these shale plays, and we are continually reviewing our expansion plans to ensure that they align with our customers’ goals in these regions,” Underhill says. “Thanks to our network of stocking locations and valve automation centers, we are uniquely positioned to provide even the most complicated of requirements quickly and efficiently.”

The company isn’t just growing one location at a time. In January 2013,

MRC welcomed Permian Basin and Eagle Ford-based Production Specialty Services to the MRC brand. This acquisition expanded the company’s service footprint in the area while also adding a talented and experienced workforce to their company.

Global Reach with a Local Touch MRC has an impressive global infrastructure to service its customers and support its suppliers. The “Fortune 500” company maintains an intricate supply network made up of more than 400 global service locations, including 14 distribution centers, 25 valve automation centers and 4,750 knowledgeable employees.

MRC leverages this infrastructure and its long-term relationships with a global manufacturing base to provide quality products to end-users. The distribution company also provides

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procurement services, work process redesign, quality assurance, safety leadership, technical support and training, project solutions, supply chain solutions and valve automation and modification services. MRC is known for its extensive inventory and experienced sales force.

“We believe in providing value through our global strength, without losing our local touch,” Underhill says.

“We know that our success is a result of the personal service we provide on the local level.”

In 2011, MRC acquired Stainless Pipe and Fittings Australia (MRC SPF), the largest distributor of stainless steel piping products in the southern hemisphere. Headquartered in Perth, Western Australia, MRC SPF brought seven locations across Australia, as well as Italy, the United Kingdom and the United Arab Emirates. MRC SPF’s 430,000-square-foot (40,000-squaremeter) facility in Perth, Western Australia also serves as MRC’s premier pipe, fittings and flange stocking and distribution center for Australasia.

Then in 2012, the company welcomed One Steel Piping Systems Australia to MRC. When added to MRC’s current business in the region, MRC became the largest full-service distributor of PVF in Australia to the markets they serve.

“The combined capabilities of our family of companies in Australia will provide our key customers and suppliers a one-stop solution for all their PVF needs,” Lane states. “We are proud of the quality companies and employees we have been able to add to our international footprint.”

“We listen to our customers,” Rory Isaac, executive VP – International Operations, says. “They wanted a global distribution company that could provide standardization and add value

to their supply chain—we delivered by

founders could have ever hoped. Yet

adding only the best operations with

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• Underbalance Drillouts

• 1440 psi 4 phase Separators

• Flare Stacks

• 2”-3” 1502 Flowback Iron

• H2O Filtration & Management

• 3000/5000/10,000 psi Sand Knockouts

www.arcticoilfieldservices.com Operations: Shane Ailport (307) 262-0713 Drilling & Completion Consulting: Shane Ailport office (307) 436-2780 BAKKEN OIL REPORT – FALL 2013

77

R&R contracting

Growth spurts

A look back at R&R Contracting’s ability to keep up with changing markets

By Reed Reimer

An R&R oil trainload facility.

R&R Contracting is celebrating its 25th year in business. When thinking about that, and comparing it to other companies that claim 50 years or 100 years, it doesn’t seem like much… but that same 25 years is a definite milestone for this company.

When Bill Reimer started R&R in 1988, he never envisioned what it would one day become. Doing his first track job, a 1,800-foot spur build by hand, he knew he could not continue at that rate much longer. The work was hard, and made harder by the fact that it was all through sweat and elbow grease. So he reinvested that revenue to pay for a tamping machine, one that would ease the labor burden on the laborers and allow them to spend more time building, and less time finishing. So in the time it took him to do the first job, now he could do two.

Growth and Expansion After having the experiences of continued growth, and preparation for working smarter, not harder, Reimer 78

BAKKEN OIL REPORT – FALL 2013

began to realize what many companies probably already knew—the hardest part about getting bigger is outgrowing your ability to do the work.

R&R has been part of many of the big booms in the Upper Central plains; starting with the massive agricultural infrastructure build-out when the Class Ones moved to 110-car unit trains, to the government-subsidized build-up of our nation’s ethanol producing capacity. Now they are a part of the Bakken and the explosion of crude-by-rail facilities in that region going on right now.

At first, R&R celebrated the good fortune of being located in a close proximity to the work in western North Dakota, which gave them the edge; but now this is less and less a factor. With more and more companies hoping to score a “big project” in the Bakken, some doing whatever they can to compete by bidding low, hoping to get a toe in the door, R&R cannot solely rely on its ability to mobilize quickly.

Instead, the factor that has and will continue to set R&R apart and above the competition is the quality of work and their ability to continue to serve the customer even when the other outfits go back home. Doing this AND maintaining the value proposition they offer is how R&R will maintain happy customers.

Cheaper isn’t always better—just cheaper.

Being prepared to meet the demands that the Bakken would offer wasn’t a walk in the park. There were times that the company was woefully understaffed in the back office to support the field crews, while they were out there laying record numbers of feet per man per day.

Couple this factor with the oil companies offering “greener grass” to a portion of the workforce, along with the shortage of beds in the region— R&R had to work hard to keep going.

Fortunately the company had some great talent at the helm, people who knew they were unable to continue doing that amount of work without the support

BAKKEN OIL REPORT – FALL 2013

79

r&r contracting

R&R rail site in Manitou, North Dakota.

everyone at the company truly deserved. Instead of folding under the pressure, R&R began a hiring blitz, bringing in talent who could handle the work at hand. On-boarding experienced project managers and enabling closer oversight to the jobs, while allowing office personnel to spend more time focusing on their responsibilities, was a first step in the right direction.

Initiating new and updated processes, while fostering the growth of communication, has been the rule of the day. With managers giving timely feedback on performance and allowing quicker decision-making processes, R&R is doubling down on its

A surfacing tamper on an agricultural loop track in Bucyrus, N.D.

ability to handle the workload.

Another factor that came with the oilfield was the customer relationships that developed and requested R&R to go well outside of their service area to do work. Historically, R&R has had offices up and down the central plains; besides Grand Forks, they have an office in Minneapolis, Minn.; St. Louis, Mo., and Brookhaven, Miss. Generally these crews have their own backlog of work to do, so when the call came to take on a project in Virginia, and another in Colorado, R&R was prepared;

Plains aerial of Manitou, North Dakota.

staff quickly ramped up the necessary resources to tackle the new challenge.

Building relationships with customers, vendors, and contractors alike, R&R is setting itself up to take on the challenges of the next 25 years. They know growth is going to happen. It’s part of the plan. And because of that, R&R Contracting is now flexing the muscles they’ve been building over time to plan for that growth—and to be proactively ready for it, before it happens, in hopes of alleviating some of the associated pains that come with that growth. w

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BAKKEN OIL REPORT – FALL 2013

MESSAGE

By Kirk Bushman, Montana Public Service Commissioner

Experience – something you get right after you needed it Kirk Bushman, Montana Public Service Commissioner, has over 25 years working in the industrial engineering sector. In November 2013, he was elected to the Montana Public Service Commission, District 2.

Before being elected to the Montana Public Service Commission, I worked for an engineering consulting firm. I was fortunate enough to obtain first-hand experience working in the Bakken oil and gas fields. There are many stories as to the challenges one faces when working in this area. I can recall one day in particular, I was travelling to a jobsite. It was 4:00 a.m. when I left my motel in Glendive, Montana, 160 miles away from the jobsite for that week. It was the closest room I could find. As I drove through Williston headed for the site, I heard the DJ on the local radio station announce the temperature outside, 30 below zero. I waited for him to say with windchill— but he never did. That was the temperature: -32 Fahrenheit, if you trust the dashboard.

We worked in North Dakota all of that winter—one of the worst in the state’s history. Finally spring came and with it, the flooding. The radio stations seemed to do constant river flow updates with the mayor of each local town. We were staying in Minot, N.D., and driving one to two hours, one way, to the jobsite each day. It was suggested to us that we check out of our hotel because of the predictions of flooding. Our fears were correct and we were forced to go as far as Scobey, Montana (over 200 miles from Minot, N.D.) for a motel room. We were still over two hours from our jobsite.

The project I was working on required me to walk down existing well sites and gathering facilities in order to update or create site documents. I travelled across North Dakota for two and a half years, from Bottineau to Medora and from Killdeer to Powers Lake, and all the places in between. Soon there were man camps, construction, and a whole lot of traffic. I remember feeling out of place in our little rental car. If you weren’t driving a pickup with a fifth-wheel or a semi-tractor trailer, then you were one of a just a few.

Working the oilfields in western North Dakota and eastern Montana definitely offers some challenges: from the weather to the logistics of finding food and fuel to the technology used to produce oil and natural gas.

When working in the Bakken, a person can gain an enormous amount of valuable experience in a short period of time.

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BAKKEN OIL REPORT – FALL 2013

Remember, “Experience is something you get right after you needed it.”

Along the way, I met some very interesting people while working in the oilfields. From the youth fresh out of high school, making more money in a week than he had ever seen in his life, who just took out loans for a $50,000 pickup and a pair of jet-skis and is now partying like a rock star, to the man who has hit rockbottom and is looking to put the past behind him and start a new future, or the person who started a business and is flying by the seat of his FRCs, dealing with the rapid growth (FRCs are fireresistant clothing, if you were wondering).

Regardless if the experience is “good” or “bad”, it is still valuable! And if we learn from our experiences, we become more valuable in the government sector, the private sector and to our own self-worth.

Fast-forward a few short years. I am no longer in the engineering business; I am now in the regulatory business.

Perhaps “Big Oil” should have built a “Big Ark?” Photo by Weston Wiedrich.

MESSAGE

Hwy 22, north of Killdeer. Record amounts of moisture sloughing off roads and well-sites are not unusual. This highway closure caused major delays in the area. Photo by Weston Wiedrich.

As a public service commissioner for the state of Montana, the challenges have changed from subzero weather, deadly H2S gas

The sun rises behind a pumpjack — time to get to work.

and risk of injury to balancing regulations without stifling the economy, looking out for the environment, promoting good stewardship, surface rights versus mineral rights, and energy independence.

These challenges can be difficult to solve as there are federal laws, state laws, agency rules, etc. Don’t forget the environmental debates, economics, and politics. It is easy to see why some people think we have a better chance of finding Bigfoot than we do of meeting today’s regulatory challenges. So how do we navigate our way to a solution?

Many levels of government have had to deal with the challenges presented by the rapid growth and development in the Bakken.

Weston Wiedrich, who is six feet tall, shows off a snow drift that will melt back to flat gravel in the summer. Photo by Weston Wiedrich.

Certainly the small communities were the first to experience the changes, from the small towns to the rural counties. There are valuable lessons that have been learned. Current regulators need to work with these communities and understand what has been done in the past in order to move forward.

I have always trusted my background to provide the guidance to meet new challenges. The Montana Public Service Commission is made up of five individuals, each with a diverse background. I believe that our diverse backgrounds will help guide regulation, thus providing a stable environment that is beneficial to both the consumer and utility provider.

I believe if we elect or appoint people with real-world experience into our government, the better chance we will have of creating policies that protect and promote prosperity—compared to electing or appointing people who have spent a lot of time and money obtaining a fancy education but have never really used it in the real world to learn the difference between theory and practicality.

By the way, if you find Bigfoot, be sure to let me know. w

Operators earned their pay this past winter, having to shovel snow in order to keep paths open to check treaters and other machinery at gathering facilities. Photo by Weston Wiedrich.

BAKKEN OIL REPORT – FALL 2013

83

Invest in Oil and Gas in the Bakken

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For qualified investors only. There are significant risks associated with investing in oil and gas ventures. The above information is for general purposes only and is not a solicitation to buy or an offer to sell any securities.

Contact us for more information on investing in oil and gas in the Bakken 1910 Pacific Ave., 7th Floor, Dallas, TX 75201 (214) 716-2200 | info@breitlingenergy.com General information on this site is not intended to be used as individual investment or tax advice. Consult your personal tax advisor concerning the current tax laws and their applicability and effect on your personal tax situation.

miller architects & builders

Miller Architects & Builders construct hotels in Bakken area to accommodate oil industry workers

By Gloria Taylor

86

Oil production in the Bakken formation

company plans to start construction on

in the area to accommodate the influx,

is booming and even greater production

yet another this autumn and is working

adding to its expertise in the sector.

is being forecast for the years ahead.

to commence construction on an

Dennis Wessel, development

In April of this year, the U.S. Geological

additional two in late fall of this year.

consultant for Miller Architects &

Survey stated that expected ultimate

The completed hotels, which include

Builders, agrees the company has had

recovery could reach an unprecedented

kitchenettes for longer stays, include: the

an influence in building the economy

7.4 billion barrels of oil.

Candlewood Suites, a hotel that opened

that has grown up around the Bakken

Thousands of workers are

in 2009; HomStay Suites, a facility that

because of its expertise in hotel

being shipped in to work in the

opened the same year, and Holiday Inn

construction.

200,000-square-mile resource area,

Express, a hotel that opened in 2012.

“The hotels we build are very

and many are finding a home-away-

All are located in Williston, N.D. The

functional. They are all extended-stay

from-home in a hotel designed and

Dickinson hotel will be another HomStay

units with two beds and kitchenettes for

constructed by Miller Architects &

Suites.

people in the oil industry. Certainly, there

Builders.

Construction on the Oak & Iron Lodge

are people who stay for a month or more

The St. Cloud, Minnesota-based

will begin this fall in Williston, while two

at a time, and sometimes companies will

design/build firm has constructed three

more hotels are in development in Tioga,

lease the rooms for up to six months or

of the hotels in Williston, N.D. and is

N.D. and Stanley, N.D. In addition to its

more,” Wessel says.

looking forward to cutting the ribbon on

new hotel construction, Miller Architects

Many of the guests will later buy

another in Dickinson, N.D., this fall. The

& Builders has remodelled other hotels

or rent homes and stay in the Bakken

BAKKEN OIL REPORT – FALL 2013

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area as the communities grow the economy and build a service industry to accommodate the workers.

Design/build specialty Miller Architects & Builders specializes in commercial design-build projects in the divisions of hotels, funeral homes, worship facilities, senior healthcare, healthcare, manufacturing/ industrial, office/retail, multi-family and commercial buildings.

As such, it can provide a singlesource, single-service, single-phone-call company to get a properly planned, designed, constructed and operated project.

“From that point on, they don’t need to call multiple contractors, multiple people to get the project up and running. A lot of our clients have

been owners/developers from outside the area who are responding to the demands of the area, but the resources are not there. But by calling us, we’ve been able to bring the resources to the Williston area in a timely manner and on budget,” he states.

The company has also worked with subtrades that have a successful track record of working with Miller and can “hit the ground running.”

The company facilitates everything from start to finish, from development to architectural and construction services.

Asked what challenges, if any, the company experienced in building the hotels in Williston, Wessel cites weather, soil issues and restrictive building sites.

“The company worked all four seasons. Depending on when you

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BAKKEN OIL REPORT – FALL 2013

start the project, you get seasonal challenges: in the spring, wet rain; in summer, it can be windy and hot; and we may have a wet fall to deal with,” Wessel explains.

“We’ve also had some issues with the soils being prepared correctly. Soils have presented some challenges, such as proper compaction rate, especially when the soils are wet and have a clay base.”

He offers an explanation.

“When the soil is dry, it crumbles like powder; when it’s wet, you can compress it like Play-/Doh. It becomes rock-hard until you put some compression on it, like a hammer, and it blows up again like a powder.

It looks fine under one condition; yet under another condition, like when it’s wet, it’s impossible to work with, so it provides some challenges to get proper soils. In 2008 and 2009, those soil products had been difficult to get to haul in,” he says.

“Now, in 2013, those soil products have been manufactured at gravel pits, and it’s much easier to obtain product.”

The Williston building sites were also limited in size, posing some challenges to contractors.

Looking ahead, Wessel said he would like to see his company have the opportunity to construct additional corporate office buildings in the area that have “more design elements than just a white rectangular building.”

“Many of the buildings so far in the Bakken have been industrialtype facilities, such as large metal buildings,” he says. He expects to see an eventual transition, however, from mainly functional buildings to more commercial-industrial buildings for use as company headquarters.

Meantime, the company’s hotel division is going full-force. w

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oilfield helping hands

Extending a helping hand In 2003, several Halliburton Baroid employees organized a sporting clays tournament to benefit a fellow employee whose family savings had been depleted by several serious and expensive surgeries. The event raised $24,500 and was considered a huge success. That good deed turned into a movement that created the non-profit organization known as Oilfield Helping Hands (OHH).

“We’re thankful that the original Halliburton volunteers decided to expand upon their efforts,” says OHH president Jim Boecker. “Otherwise, we wouldn’t be assisting as many oilfield families through personal financial crisis as we do today. Ten years ago, it started with one clay shoot, for one fellow employee. We now have nine annual fundraising events, three separate chapters, 17 corporate sponsors and hundreds of dedicated volunteers who make everything

happen. We’ve come a long way, but we’re always ready to expand if we can.”

OHH raises money through corporate memberships and fundraising events. Each year, the organization hosts a classic car show and motorcycle show, spring sporting clays tournament, saltwater fishing tournament, golf tournament and a fall sporting clays tournament. Upstream oil and gas operators and service company sponsors donate money and items for door prizes and auctions.

Their financial support defers operation expenses for each event, helping to net the highest percentage of proceeds to assist families.

“Our fundraisers and corporate sponsors are the keys to our success,” says Boecker. “Their contributions are invaluable. We wouldn’t be where we are today without the help of our active members and volunteers. It is indicative of our industry, really.

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BAKKEN OIL REPORT – FALL 2013

The word ‘can’t’ is not often heard in the oilfield—it never gets anything accomplished.”

“The good stewardship of our industry and our active membership makes huge impacts in families’ lives. Making a difference within our community is extremely rewarding. We welcome new active membership and the expansion of new chapters.”

Individual OHH membership is free. Active members participate in fundraising events and attend monthly luncheon meetings. Not only are members updated on upcoming events, but they also hear first-hand stories of where OHH funds are being distributed.

“I think it’s important for our members and sponsors to see the faces and hear the stories of the individuals they are directly helping,” says Boecker.

“In some cases, we’ve helped change the lives of an entire family. A little girl can see now because we helped by financial assistance to defer costs for her surgeries. A man has a chance to beat cancer because we assisted with his everyday needs while he was focusing on getting better and back to work. People in Oklahoma are supported after a devastating tornado thanks to our OHH chapter officers, active members and oilfield workers.

That is why we gather together each month. That’s why we continue to volunteer. That’s why companies sponsor. It’s important to share in the families’ thanksgiving. It makes you want to go out and do it again and again. And we do.”

Boecker explains that the funds raised by OHH chapters stay in that community for their families.

Funds are distributed to the various

oilfield helping hands

applicants based on OHH’s basic prequalifications, an active OHH sponsor member and their financial requests.

“Of course there are extenuating circumstances when it comes to timing,” he says. “Families affected by natural disasters or terminal illnesses are certainly taken into consideration.

We have a selection committee which reviews the applications that have been through pre-qualification. The applicants are discussed by committee to establish the assistance needs and what we provide, however we can.”

In order to qualify for financial assistance, the recipient must live and/or work within the OHH chapter area. For instance, the original and now national OHH chapter supports upstream oilfield workers in greater Houston and surrounding counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery and Waller. Also included are oilfield workers who live in other Texas counties but commute to Houston for their work. The applicant must be nominated by an OHH active member, and 75 percent of the applicant’s family income and a minimum of five years of employment verification must be derived from the exploration and production side of the oilfield.

Different parameters apply to both chapters in Oklahoma and Louisiana.

Recipients must live within the 22

“We know that life isn’t always

parishes that make up the heart of

perfect, and the last thing a roughneck

Acadiana in Louisiana. Anyone living

would ever ask for is a hand-out. This

within the state of Oklahoma is welcome

is our hand up to our industry to keep

to apply. OHH is currently campaigning

working and providing good livings

to starting chapters in other regions of the United States.

As of July 2013, the National OHH Houston Chapter, alone, has provided financial aid to 191 families in the oil and

to our families,” Boecker states. “OHH reminds us that using our hands to serve others in the oil and gas industry can make a huge difference in the lives

gas industry experiencing crisis-related

of our extended oilfield family.”

hardships. The organization eclipsed the

To learn more about how you can

$2-million mark for funds allocated to

start an OHH chapter in your area, visit

help oilfield workers and their families

the organization’s website at www.

touched by tragedy or disaster.

oilfieldhelpinghands.org. w

BAKKEN OIL REPORT – FALL 2013

91

REPORT

Rapid City, Black Hills play major supporting role in energy boom It’s a fact. During the Colorado Gold Rush of the 1860s, the bulk of gold mining took place in the Rocky Mountains, not Denver. A decade earlier, San Francisco was hundreds of miles away from the California Gold Rush. Yet both cities played major supporting roles in the economic surges that followed the gold seekers.

Today, we’re seeing a different kind of gold rush—for oil, gas and other resources—in North Dakota’s Bakken formation, the Niobrara play in Wyoming and Colorado, and the Cowboy State’s venerable Powder River Basin.

Rapid City, South Dakota, and the Black Hills region—less than a day’s drive from all of these energy centers—is playing a major supporting role in the in the West’s ongoing rush for Black Gold.

The Black Hills have the region’s best airline connections, including direct flights to Denver, Dallas and Houston. The economy is diverse enough to support two-career families. Housing prices are stable. Retail shopping is abundant. The region is home to

92

BAKKEN OIL REPORT – FALL 2013

two universities, including the South Dakota School of Mines & Technology, whose engineering graduates are stepping directly into the energy industry. The climate is mild, even in winter. And South Dakota’s business climate is among the best in the nation.

Energy-related companies are already setting up shop in the Black Hills. WL Plastics built a facility to manufacture pipe in Rapid City. Calgary-based Caber Engineering moved its U.S. headquarters to Rapid City recently. Law firms, engineering companies, manufacturers, and others are opening offices here. And companies that have been here a long time are expanding to meet the growing demand from the Williston Basin and other energy centers.

“We’ve been talking to a lot of people in the energy industry, and they are seeing the Black Hills’ distinct advantages,” says Benjamin Snow, president of the Rapid City Economic Development Partnership. “Rapid City is a good strategic fit for them.”

REPORT

Newly made plastic pipe, bearing the South Dakota imprint, sits outside WL Plastic’s new Rapid City manufacturing facility. The Texas-based company built the plant to better serve energy customers in North Dakota’s Williston Basin and other energy-producing regions near Rapid City.

Officials from WL Plastics, joined by Rapid City government and business representatives, cut the ribbon on the company’s new Rapid City plant as Jason Wittenberg from the Rapid City Area Chamber of Commerce snaps a photo. The ribbon-cutting ceremony was held on August 13th, even though WL has been in production in Rapid City since June 2013.

Caber Engineering

leader in tank terminals, rail loading, gas processing and carbon

Caber Engineering is a textbook

capture throughout North America.

example of the type of industry Rapid

Caber has moved its U.S. operations to Rapid City. The company

City hopes to attract. The Calgary,

opened an office in the Black Hills Development Center on the

Alberta-based firm is an energy industry

campus of South Dakota School of Mines & Technology in the

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THE RAPID CITY ADVANTAGE • Great Air Service – Direct flights to 8 cities, including Houston, Dallas, Denver.

• Education – Top-ranked schools like South Dakota School of Mines & Technology.

• Economic Diversity – Agriculture, tourism, medical, financial, manufacturing.

• Black Hills are a million-acre playground for fishing, hunting, skiing, snowmobiling.

FIND OUT MORE BENJAMIN SNOW, President bsnow@rapiddevelopment.com www.RapidDevelopment.com Rapid City Area Economic Development Partnership 525 University Loop Suite 101 Rapid City, SD 57701 605-343-1880

BAKKEN OIL REPORT – FALL 2013

93

REPORT

summer of 2013. One reason the company chose Rapid City is its location at the center of emerging energy centers in Colorado and Wyoming, as well as the Bakken right next door in North Dakota.

WL Plastics WL Plastics, based in Fort Worth, Texas, saw the strategic value of Rapid City’s location early on. The company manufactures high-density polyethylene (HDPE) pipe and related products for the oil, gas, mining, industrial and municipal water markets.

It’s one of the largest makers of polyethylene pipe in North America.

The firm began production this summer at its new 45,000-squarefoot manufacturing facility in Rapid City. WL Plastics expects to have a staff of up to 50 people. The facility can produce 60 million pounds of pipe per year in diameters ranging from one inch to 24 inches.

Jackson Lewis LLP A law firm that specialized in labor and employment law, Jackson Lewis LLP has 750 attorneys in 53 offices nationwide—now 54 offices. The firm is opening a Rapid City office with a contingent of three attorneys and support staff. Among the firm’s client list is a growing number of energy firms that need legal help in matters such as employee benefit programs, wage-andhours compliance and workplace safety.

Attorney Kathy Barrow of Jackson Lewis had been vacationing in the Black Hills for 10 years. She loved the area, and as she saw the growth of the Black Hills business community, she begged the firm’s management committee to let her “plant the flag” at a Rapid City office. She’s also a staunch supporter of economic development.

Earlier this year, she led a group of local business officials on a trade mission to Houston to talk about the opportunities in the Black Hills.

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TrueNorth Steel TrueNorth Steel manufactures tanks, corrugated pine and other steel structures, including oilfield products such as production tanks, skid tanks, containment systems and catwalks.

The company has been around since 1945, and its headquarters is in Fargo, N.D. TrueNorth acquired Dakota Steel in Rapid City, a long-time regional supplier of structural steel and fabricated products.

Adams-ISC A subsidiary of ISC Companies in Minneapolis, Adams-ISC serves markets such as energy production, forest products, mining and construction. The company’s products and services fall into four groups: the machining and fabrication group; bearings, power transmission and hydraulics group; equipment and hydraulic repair group; and pipe and vessel group. Adams-ISC provides its services to organizations that build or maintain industrial facilities.

The company is rapidly expanding its Rapid City workforce in order to meet growing demand from North Dakota’s Williston Basin. Labor shortages in western North Dakota make it hard to find skilled help there, officials have said. It’s more costeffective to build or repair equipment in Rapid City, and then transport it to the Williston Basin.

Kadrmas Lee & Jackson (KLJ) A well-established, 75-year-old engineering firm, KLJ has had a presence in Rapid City since 2000. The company’s Rapid City office deals with airport design, municipal transportation, survey work, and environmental and archeological services.

KLJ is headquartered in Bismarck, N.D., and 10 of its 19 offices are in North Dakota. However, the Rapid City staff has been working on North Dakota projects. Survey crews from Rapid City travel to North Dakota, and the engineering staff helps supplement the project work from various North Dakota offices.

To find out more about Rapid City and South Dakota’s Black Hills, visit RapidDevelopment.com or contact Benjamin Snow, president of the Rapid City Economic Development Partnership: bsnow@rapiddevelopment.com or by phone: 605-343-1880. w

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No bust for the oil boom, USGS reports

It’s here to stay

By Laura Bailey

Rachel Sawicki, communications director at Williston Economic Development, is asked all the time, “How do you know this is going to last?”

Sawicki and her colleagues point to all the oil companies that are moving into the area. They’re not just putting up temporary headquarters, she says. They are building state-of-the-art facilities, investing in housing and putting down roots in the community. Retail development is exploding, and dozens of new stores and restaurants are in the works. Subdivisions are being approved almost monthly, and new homes are being built everywhere across the Williston Basin. Still, people think of the emerging oil industry as a boom that’s bound to bust.

She now has one more convincing argument, thanks to the United States Geological Survey (USGS) which recently released an updated oil and gas resource assessment for the Williston Basin, including the Bakken and Three Forks formations. According to the USGS, the two formations combined contain almost 7.4 billion barrels of technically recoverable, undiscovered oil. The new estimate is double what the USGS estimated in 2008, the last time the USGS analyzed the resource. For those living and working in the Williston

Basin, the report is monumental: It means that oil has become a lasting industry and will provide many decades of prosperity.

“I think it sometimes takes something more than just word-of-mouth to convince people,” says Sawicki. “It takes something like this assessment for people to know this is legitimate.”

The USGS assessment found that the Bakken formation has an estimated oil resource of about 3.65 billion barrels, and the Three Forks formation has an estimated resource of about 3.73 billion barrels of oil. Combined they will provide some 7.38 billion barrels of oil.

The assessment was done as part of a new initiative by the USGS to assess the nation’s oil reserves. The doubling of the oil resources in the Williston Basin is primarily a result of the assessment of the Three Forks formation, which was not included in the 2008 assessment.

The Three Forks formation, which was previously thought to be largely inaccessible, sits deeper than the Bakken, but stretches well into Canada, Montana, and South Dakota.

“Little information was known about the Three Forks formation when the first assessment was done in 2008,” states Stephanie Gaswirth, USGS Bakken assessment lead. “We didn’t know it

would become a resource play at the time.”

Oil-drilling technology has developed since 2008, making the Three Forks formation accessible—another reason the 2013 assessment was done, Gaswirth adds. Like the Bakken, the Three Forks formation is made of tight rock known for its low porosity and low permeability. The Three Forks formation is deeper than the Bakken, but is still ideal for horizontal drilling and hydraulic fracturing. Although the Three Forks formation is vaster than the Bakken, its development will utilize the wells and infrastructure already in place for the Bakken, Gaswirth states.

The new assessment and the increased estimated reserve wasn’t much of a surprise for the oil industry, which has been working on even more advanced technology to recover more oil more efficiently and with less waste.

“What this study really does is it shows investors that the Bakken is going to be here for a long time, well into the future,” says Tessa Sandstrom, communications manager for the North Dakota Petroleum Council.

The oil industry is focused on developing technology and innovations to improve the rate of recovery. Every one-percent increase in the rate of

According to the USGS, the two formations combined contain almost 7.4 billion barrels of technically recoverable, undiscovered oil. The new estimate is double what the USGS estimated in 2008, the last time the USGS analyzed the resource. For those living and working in the Williston Basin, the report is monumental: It means that oil has become a lasting industry and will provide many decades of prosperity.

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recovery has the potential to add an additional one billion barrels of oil, Sandstrom says.

“This is not a boom; it’s an industry with its own economy and employment base,” she emphasizes.

Since the first assessment was done in 2008, the USGS estimates that some 4,000 new oil wells have been drilled, which were used to collect data for the 2013 assessment. There are hundreds of new wells going in each year, Sawicki says, and with these new estimates, there is the capacity in the Williston Basin for several thousand more.

Just as fast as wells are drilled, the population of Williston has grown. The community started with about 28,000 residents and has grown to an estimated 40,000 temporary and permanent residents, Sawicki states. Based on oil industry growth, community leaders are projecting to a total population of 75,000 people.

“The boom has become so much more than anyone anticipated and we’re still trying to play catch-up,” Sawicki concludes. w

Location of the Three Forks Formation Assessment Units (AUs) in the Williston Basin. Inset map shows location of the Bakken TPS (pink). Image courtesy: U.S. Geological Survey. Online: http://pubs.usgs.gov/fs/2013/3013/

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MESSAGE

By Bob Lake , Vice-Chairman of the Montana Public Service Commission

Energy: the future of the Montana economy Fossil fuels have been the driving engine of the United States economy since the first discovery of oil way back in 1859.

The United States has an appetite for fossil fuels that is far greater than any other developed nation in the world. This appetite is sated by the world’s largest reserves of both oil and coal.

There is a very strong reason that we enjoy the highest standard of living in the world. We have utilized the natural resources that we possess within our borders to the advantage of our citizens.

The auto industry leads the world in innovations, and continues to provide the technology that we all expect when we go out on that always exciting car-buying trip.

This brings us to the issue at hand: what is it with the hard-line “environmentalists” who are unwilling to accept the reality of the current world we live in, and that fossil fuels are a critical element of our economy? Without fossil fuels in the mix of available sources of energy, we can never meet the demands of the consuming public. The hardliners appear to be unwilling to accept anything short of their dream of a perfect world with nothing but “renewable” energy (although in many cases, they seem unwilling to accept the most renewable resource, hydro, as a usable source of energy).

The Bakken should be heralded as the savior of the U.S. and Montana economies. The expanding oil and natural gas reserves, which are being discovered on almost a daily basis, promise to make our great nation totally self-sufficient for our energy needs in the very near future if federal lands are opened and refining capacity is allowed to be constructed.

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However, having the reserves does not make us whole. If we do not possess the wherewithal to move on to the next step of actually utilizing our treasures, we may as well not have them at all.

Some people tout the belief that we should save the resources for our children and grandchildren. It is a noble and worthy thought, but it doesn’t keep the bills paid. As technology develops, our energy source and supply will take many different turns as we continue through the evolution we must follow in order to achieve both independence and a lowcost energy supply.

Somehow we have lost our concern for the consumer; we have allowed personal agendas to replace the commitment to affordable energy, and the religion of sustainability to replace the logic of availability.

The Bakken and Montana sit at the epicenter of the new world of energy independence. If allowed to grow, the United States could have the next 100plus years as the new “Middle East” for petroleum. Our coal production will bring electricity to millions of homes around the world.

We live in today’s world. We need to utilize our current available resources while developing the technology to supply our future energy needs. As this technology is being developed, it is foolhardy to either tax or regulate our current energy supplies to the point they cease to exist. The consumer will take the brunt of the effects of those efforts through higher prices on needed services and products. I am aware that it is the strategy of some groups that increased prices will modify certain behaviors and

reduce consumption; but asking the elderly, lower-income people, physically impaired people, and small business owners to pay for the costs of a personal agenda is unacceptable. We should not rely on assistance programs to see these people through the higher costs, because that only results in higher costs for other goods as the increased prices are passed on to consumers.

So, instead of fighting against the development of our oil and coal industry, we should be celebrating the opportunities that are created as a result of these resources. As we move forward with the extraction and processing of oil, natural gas and coal, Montana can join the states of Wyoming and North Dakota with good-paying jobs for our young families, well-funded schools, strong communities, good roads and a lower property tax base as revenues grow from the expansion of fossil-fuel production.

The protestors claim that they want to save the earth by reducing CO2 pollution caused by fossil fuel, electrical generation, and motor vehicles. I have heard that the answer is a “carbon tax” such as some of the Canadian provinces have, or perhaps a cap-and-trade law like California uses. These same individuals protest timber harvest in our national forests. Current USFS management practices, which are influenced by environmentalists, prevent the harvesting of trees that could be utilized as lumber to build homes. The resulting fires, due to the build-up of fuels, make

MESSAGE

the life in our western mountain valleys totally unbearable every summer; the smoke and air pollution caused by the burning of thousands of acres of valuable timber causes air quality alerts and give western Montana a failing grade for healthful living. Yet, Montana has had very few devastating fires on DNRC-managed land because the forest is managed for multiple-use—not just allowed to become tinder-boxes that cause massive amounts of smoke and add millions of tons of CO2 to be added to the atmosphere. The carbon dioxide produced by these fires far exceeds all other sources combined. If CO2 is the true target of the environmentalists, then we should see them standing at the forest border with chainsaws, eager to remove the decaying trees that cause such a massive amount of carbon to be produced.

Montana is a wonderful place in which to live, raise a family, and to work.

We can have a healthful climate, a strong economy and a well-paid workforce without destroying the environment.

Natural resource development is and can be done in a responsible way. But, it must be allowed to happen if we are going to achieve the goals and desires we want and deserve.

About the Author: Born in Ronan, Montana, Bob Lake graduated from Ronan High School and served in the U.S. Army 1956-58. Lake was elected to the Montana Public Service Commission, representing District 4, in 2012, and currently serves as vice-chairman. Lake has been president of the Bitterroot Chamber of Commerce, chairman of the Montana Chamber of Commerce, president of the Montana Chamber Foundation, and has served on Montana

Lottery Board as well as participated in several other clubs and organizations.

Lake also served in the Montana House of Representatives (2003-2010), was chairman of the House Taxation Committee (2007-2010); chairman of the Ethics Committee; was appointed to the Select Committee on Education Funding Lawsuit 2005; has served on the Education Committee and the Rules Committee.

Lake was elected to U.S. Senate in 2010, served as vice-chairman of the Taxation Committee, and has been a member of energy, telecommunication, and education committees.

Lake has 38 years’ experience in the animal-feed industry, and was owner of Lake Milling Inc. in Hamilton for 22 years.

He has been married to Faithe for the past 55 years, and has two grown children and two granddaughters. w

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eide Bailly llp

The Bakken technology crunch – are you stuck?

By Amber Vogel, Senior Business Technology Consultant

A Technology Crunch Many organizations in the Bakken region are faced with technology challenges due to rapid business growth and increased customer demands. Typically, it takes many years for mid-to-large organizations to reach their size; however, the majority of small organizations in the Bakken have grown into enterprises within just a few short years. When a $5-million organization is running QuickBooks and processing transactions manually using paper and Excel spreadsheets, growing to $100 million in less than five years makes it nearly impossible to keep up with the demands of daily transactions.

The lack of experience and resources makes it very difficult for businesses to train, retain and keep up with business demands.

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Many organizations are spending the majority of their time getting the data in the system just to generate invoices and pay bills. With the lack of time and technology, businesses are unable to analyze trends, generate reports on major customers or create financial statements. The environment these businesses are operating in is very reactive, rather than proactive.

Historically, organizations in the Bakken have chosen not to invest in technology infrastructure and software systems; therefore, today they are experiencing severe pains in operating their businesses. In order to connect remote workers, provide a centralized location to store data and files, and keep up with the mobility trends of their competitors, Bakken businesses are being forced to create, update and maintain sophisticated networks and systems. According to Gartner, a consulting firm that researches and benchmarks analytics, the average technology spent based on percentage of revenue for organizations in the construction industry is 1.2 percent, transportation is 3.1 percent, and energy is seven percent.

We are finding a significant gap in revenue and technology investment in the Bakken and have been working closely with businesses to get caught up with today’s technologies.

Impact of New Technology Systems Donn Hoffelt, owner of Triangle Electric, Inc. in Williston, N.D., is in the process of evaluating new software systems for his business. Donn started his business during the boom in the late ’70s and early ’80s. The rapid ramp-up and -down of that burst has caused Triangle Electric to be hesitant about managing growth. Like most Bakken businesses, today Triangle Electric is ready to accept that the industry is here to stay. Hoffelt recently stated, “I should have implemented a new system 20 years ago.”

Fortunately Eide Bailly has been working with Triangle Electric and implementing a new job-cost accounting system. Hoffelt and his team will now gain access to real-time information, an integrated system and mobile solutions for their workers in the field. Hoffelt is one of many clients who are experiencing the benefit of investing in technology and the positive impact it can make in day-to-day operations.

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Finding a Solution If you’re like many Bakken businesses, you may identify with one or more of the challenges listed in the chart below.

Get Unstuck … And Start Planning It’s more important than ever to get the right systems and technology in place today. Doing business in the Bakken is only going to become more complex, interconnected and fast-paced.

With the right technology, you can leverage your employees’ time and skillsets to maximize

Eide Bailly will be hosting a cost segregation seminar as part of a four-part series on business growth in the Bakken region. This seminar, entitled “Maximizing Your Investment in Your Real Estate”, will be held on November 12 from 7:30 to 10:30 a.m. at the Grand Williston Hotel and Conference Center, 3601 2nd Avenue West in Williston. This session will cover the benefits and practicalities of cost segregation studies and how they work, as well a review of the repair regulations and their impact. Presenters will include Rod Axtell, CPA, CCSP, partner, and Robert Lehmann, senior manager.

profit and minimize stress. Your business will be well-positioned to handle the growing demands and embrace new opportunities.

Contact Eide Bailly Technology Consulting at 866324-0968 today to learn more about the solutions we

To RSVP for this FREE session, please visit www.eidebailly.com/about-us/events/ or contact Baylee Amy at bamy@eidebailly.com 507-386-6218.

Space is limited, secure your spot today!

provide, or visit us at eidebailly.com/technology. w

Infrastructure Challenge:

Eide Bailly Solutions:

Lack of access for remote workforce (time entry, core business software, network files).

Configure remote access to server, mobile applications, website portals.

Rapid increase in the number of locations and employees.

Expand infrastructure and network connectivity, purchase new hardware, transfer infrastructure to new locations.

Inconsistent communication tools.

Implement standardized email, messaging, and live-meeting solutions.

Lack of centralized data-file sharing.

Establish a network file share among offices, implement an intranet.

Outdated infrastructure.

Assess existing IT environment, provide recommendations on structure and tools.

Systems Challenge:

Eide Bailly Solutions:

Significant manual processes and disconnected data points. Business process review, create integrations between systems, provide recommendations on eliminating manual processes.

Outgrown existing systems (i.e., inventory, job cost, accounting, etc.).

Define requirements for new system, provide solution options, assist with selection and implementation project management.

Lack of access to data to make critical business decisions.

Connect to data points and provide business intelligence tools and dashboards, custom report writing.

Demand for real-time information from vendors and customers.

Evaluate existing systems and processes and recommend solutions that provide real-time data.

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Presto geosystems

Soil confinement system reduces fill and maintenance for pad and road construction

By Jeremy McConnell, P.Eng., Geotechnical Engineer, Presto Geosystems

pad in the traditional way and then repairing the distressed portions as often as it takes to keep these areas serviceable for heavy trucks and machinery. Over-excavation and replacement requires road aggregate or fill to complete, which is often difficult to find, expensive to purchase, and of marginal durability. Soil-cement mixtures require suitable temperatures to properly cure (strengthen); because of this limitation, soilcement mixtures placed in sub-freezing temperatures will not attain the strength needed to support heavy loads. And while a company may be lucky and not have to heavily maintain the access road or oil pad, more often than not, the company will incur considerable expense by dedicating man-power and machinery resources to maintaining a passable road. In some cases, drilling or completions will shut down completely to Wet Weather, Soft Soils Cause Access Problems The late-winter snows and cool, wet spring of 2013 challenged oil producers, drilling companies, and oilfield services providers as never before. The natural soils of the Bakken region consist of a variety of silty and clayey materials, which normally lose their strength when wet or saturated, causing access problems typical of spring construction. What made this spring unique was the length of time the soils remained (and in some places, still remain) saturated and weak enough to delay earthwork or access operations. Even as late as the middle of June, many producers and services companies delayed accessing otherwise ready well sites because the site soils could not support construction equipment or drilling operations without significant subgrade preparation.

Conventional Soil-Strengthening Methods for Pads and Roads If a well pad or an access road is not constructed over the winter or during dry weather, oil producers will typically wait until the soils dry and strengthen before trying to correct the situation. Corrections could include over-excavation/ replacement of the soils, amendment of the soil strength by adding cement, or most commonly, building a road or well 102

BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2013

allow the soil conditions to be corrected.

Soil Reinforcement through Geosynthetic 3D Confinement Geosynthetic soil reinforcement offers an alternative to these methods of increasing the load-carrying capacity and durability of access roads and well pads. One such technology is the cellular confinement system developed by Presto Products in

presto geosystems

the late 1970s. Originally developed in cooperation with the U.S. Army Corp of Engineers as a fast, easy-to-deploy beach access system that strengthens the sand found abundantly on beaches, the “GEOWEB” system expands to form a cellular structure. This structure, when infilled with granular materials such as sand, gravel, or crushed aggregate, uses the principal of confinement to impart added strength to the roadway fill materials. By adding strength to otherwise marginal or unsuitable materials, the GEOWEB system effectively bridges soft soils and creates a strong and durable driving surface for even the heaviest of loads.

Confined Fill Reduces Cross Section and Maintenance A GEOWEB-reinforced roadway or drill pad will support heavy truck traffic and drilling operations over a variety of soil conditions. For example, some Canadian oilsands producers such as Devon Energy place the GEOWEB access road and drill pad system, complete with a woven geotextile fabric, over the “muskeg” soils (bogland) so prevalent in the boreal regions where they extract oil. The producers expect these roads and

pads to support eight-ton wheel loads on a long-term basis, and the engineered GEOWEB system delivers roads that can do this. Consider that an unreinforced road or pad will typically require one meter or more of unreinforced road aggregate to support such loads; then consider that the GEOWEB confinement system infilled with a reject sand was able to offer a much-reduced cross-section (50 to 85 percent reduction,

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BAKKEN OIL REPORT – FALL 2013

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presto geosystems

typically) and provide equivalent support. As an added benefit, the maintenance grading required for these roads is substantially reduced compared to typical roads because the GEOWEB material, placed near the road surface, confines near-surface fill and reinforces the road base; this prevents the shearing that creates ruts and potholes. One oilsands producer reported that they have not graded their road for nearly three years of operation.

Performance not Impacted by Wet Weather or Soft Soils The confinement sections are shipped in compact bundles making them easy to transport and deploy. On site, the sections are expanded into position and connected without special handling equipment, and filled with the selected infill.

The roadway is ready for traffic immediately after infilling and compaction. Perhaps most significantly, the GEOWEB material can be installed in the middle of winter, when roads are typically constructed in the northern reaches of Canada. When the soils thaw, the roads continue to function even as the thaw weakens the subgrade soils. The strength and flexibility of the GEOWEB system allows operations to continue unimpeded by these weak soils.

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A Better Way to Build Pads Oftentimes oil and gas producers in North America, such as Imperial Oil, Apache Oil, and Cenovus, will install timber mats to support operations temporarily over soft ground.

These mats are then removed when they are no longer needed. Timber mats present logistical and restoration challenges that must be overcome; the mats are heavy, become waterlogged, and can often be difficult to extract from the ground. The fill beneath timber mats also requires restoration when complete and before the drilling company turns the site over to completions. Oil producers are turning to the GEOWEB system as a way to support their heavy loads, minimize pad restoration, and to build their pads one time.

By utilizing local fill materials and reducing the resources needed for road maintenance and construction, the GEOWEB system effectively utilizes local resources to overcome the hard winter and spring-access challenges in North Dakotaâ&#x20AC;&#x2122;s Bakken region. And they do so within a faster timeline and at less cost than conventional methods.

For more information, contact Jeremy McConnell, P.Eng., Presto Geosystems, by phone: 920-738-1311. w

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Business for sale:

By Scott Lester

Why a business is not like real estate

Some business owners and real estate agents tend to think that selling a business is just like selling real estate, but finding out the differences the hard way can be expensive. First, while it may seem easier to lump them together, separating the real estate from the business purchase can be a good idea. Second, some commercial real estate agents will be tempted to price a business just like commercial property, but the two are entirely different.

Third, while real estate goes to the highest bidder, in a business sale, proper valuation, deal structuring and management of the transition can be at least as important as price. Finally, the complexity and exposure to potential litigation liability in a business transaction is much greater in real estate sale.

It is often in the best interests of both buyer and seller to keep the real estate separate from the transaction. By retaining ownership of the real estate, the seller in effect is locking up what often is the largest single business asset as collateral for seller financing. And if the lease includes a properly structured purchase option, the seller retains the ability to cash out at a later date … such as after new ownership has proven its ability to perform and repay debt. Meanwhile, the buyer often doesn’t want to tie up capital in the purchase of the real estate that could be used as working capital to grow the new operation.

Valuing real estate is also entirely different than a business.

Commercial real estate professionals have the expertise to evaluate rental income and cash flows and usually can help their clients make investment decisions. But an operating business is both financially and fundamentally a different animal than property. That’s because even a thorough analysis of the profit/ loss and balance sheet doesn’t begin to address all the critical issues that must be considered. For example, the value of real estate can be easily calculated by looking at tangible things such as square footage, acreage, replacement cost and comparable sales. But business value can often be tied up in very intangible things … such as the concentration of customers, strength of competitors, growth rate and depth of management.

With real estate, getting the best price from a qualified buyer is the priority. With businesses, it’s important to find someone capable of paying a good price, but it’s equally important to consider if they will be able to successfully operate the business.

That’s where the nature of a business transaction is much different than real estate.

With businesses that are priced too high, the debt burden saddles the buyer so they may be unable to survive a slowdown.

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And since most transactions include seller financing (usually at least 10 percent of the purchase price), sellers need buyers to continue to be successful so they can get paid. That’s where another important aspect comes in: the transition period.

While a real estate transaction is often done without buyer and seller ever meeting, the business buyer and seller usually work together during a transition period to ensure the business gets smoothly handed off. This period can last as long as 12 to 24 months. With property, it’s all about selling to the highest bidder and it doesn’t much matter if negotiations get combative. But the long transition period following a business sale obviously will work much better if the parties have a cordial relationship.

Therefore, experienced merger and acquisition advisors avoid taking an adversarial “one sided” approach, and instead work at facilitating the negotiation to find common ground and a deal structure that works for both buyer and seller.

Finally, while the average duration of real estate transactions might be measured in weeks, it typically takes up to three months for a business transaction to close. That’s partially because of all the analysis required, and partially because of the much more complicated tax and legal consequences. While an appraiser can size up a piece of real estate in an afternoon, most buyers of businesses require up to a month to complete their analysis and due diligence. And while most real estate deals can be handled by just an agent and escrow company, almost every business transaction has intimate involvement of both buyer and seller’s attorneys and accountants.

Over the years the asking prices that we’ve seen for misrepresented businesses have varied wildly: from under half what the business is worth to seven times what it would ever sell for. What’s more, we’ve seen some of these deals go south, with buyer and seller entangled in fruitless litigation. Selling a business for the right price to a good buyer who can make good on the price, and finding a deal structure that works for everyone, is difficult enough without dealing with the issues associated with mispricing. Business mergers and acquisitions is also one of the most highly litigated fields, so it’s always good to cover your bases by hiring the right professionals, right from the start.

About the Author: Scott Lester, MBA, is a broker and partner of PCS Brokers, a business brokerage firm that has successfully completed more than $300 million business sales in the Williston Basin. w

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HR trends and insights:

Workforce conditions in Canada’s Bakken oil play

Oil and gas investment in Saskatchewan and Manitoba has reached record-breaking levels in the past few years, driven by doubledigit growth in expenditures in the Bakken oil play in Canada. This has created a difficult recruiting and retention environment as companies competed for a limited local labor force.

Going forward, investment is expected to continue, but not at the robust growth levels experienced in the initial development phase. Despite a more gradual growth outlook, petroleum companies operating in the region continue to face workforce issues. They are addressing these problems through a diverse set of best practices to increase retention, more effectively recruit workers to the region and reduce labor costs.

In response to sharp increases in oil and gas investment, the overall demand for oil and gas workers in the Bakken region has expanded across the three primary sectors (i.e., exploration and production, oil and gas services, and pipeline), contributing strongly to the total job growth in Saskatchewan and Manitoba.

An estimated 6,200 Bakken-specific oil and gas workers were employed in 2012 in the two provinces. In the near term, oil and gas employers report staffing levels will remain stable or moderately grow in order to meet the needs of increased production and expansion.

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Oil and gas employers in the Bakken region are recruiting for a variety of occupations and skill sets including: • engineers, geologists and technicians • plant operators and power engineers • oil and gas service supervisors • experienced hydraulic fracturing and tubing technologists • experienced drilling crew workers, including managers and supervisors • skilled trades workers • recording crew helpers • pipeline maintenance staff • mineral and surface land administrators and agents • business development managers and representatives, sales professionals and other office workers leading to high labor costs. The geography of the region makes it difficult for employers to move workers between development sites because oil reserves are dispersed across a wide distance spanning several hundred miles. The labor force that supports development in the region is comparatively small and geographically dispersed, forcing employers to look beyond the region to meet a portion of their workforce needs.

Companies reported, however, that the region’s remote

location and high housing costs make attraction of workers difficult.

Petroleum companies operating in the region compete strongly with one another for the limited pool of local workers.

They also compete for similar skill sets with other resource-based sectors operating in the two provinces. Based on an analysis of online job vacancies in the Bakken region or at regional offices in Regina, Saskatoon or Winnipeg, approximately 77 percent of job postings for roles critical to the oil and gas industry were for companies in competing industries.

Retirements of senior, experienced staff add to companies’ workforce challenges. While the retirement of experienced workers is a challenge across Canada, it is a bigger problem in this region where there are fewer experienced oil and gas managers and the percentage of workers approaching retirement age is comparatively high. These challenges lead to high labor costs for oil and gas companies in the region, as market wage rates increase and companies contend with an employee turnover rate that is higher in the Bakken region than it is in Calgary, Edmonton and other major cities in Canada.

Human resource managers for the Bakken region anticipate

Steady growth in prairie oil pushes innovative workforce practices The ongoing development of the Bakken oilfield in Saskatchewan and Manitoba is requiring companies to apply a range of best practices to the challenges of workforce recruitment and retention, according to HR Trends and Insights: Workforce Conditions in Canada’s Bakken Oil Play1, a report released in May 2012 by the Petroleum Human Resources Council of Canada, which outlines how Bakken investment and production has experienced overall steady growth, describes workforce conditions in the region, and acknowledges a number of progressive HR practices by industry.

“While labor shortages have eased from the high levels experienced to 2011, oil and gas companies continue to operate in a competitive labor market environment in the region, facing critical challenges for attraction and retention of workers,” says Cheryl Knight, executive director of the Petroleum Human Resources Council of Canada.

“Coordinated action taken by industry, government and labor supply stakeholders can ease these challenges by continuing to implement best practices for attracting, retaining and developing the workforce, as well as introducing strategies to lower barriers leading to recruitment success,” says Knight.

“The Bakken is now a major source of Canada’s oil production,” says Knight, “with estimates of recoverable oil in the billions of barrels.” In 2011, approximately 37 percent of all crude oil production in Canada originated in Saskatchewan and Manitoba, where the Bakken field is the highest producer, compared to 39 percent from Alberta.

“The result is that the Bakken is now a significant site for oil and gas employment,” says Knight. In 2012, after several years of double-digit growth, 6,200 oil and gas workers were based in southeastern Saskatchewan and southwestern Manitoba.

to regional training programs which would be beneficial, and

steady to moderate growth in Bakken-related employment.

“Further growth can only be achieved through effective workforce practices,” states Knight. “First, it’s a hard-to-recruit location. Second, turnover and retention are concerns with real competition from other industries requiring similar skills.

And third, there are shortages of skilled workers in specific occupations. On top of this, many skilled workers are reaching retirement age,” she says.

“Companies are taking innovative steps towards positioning the industry as an employer of choice and they should be congratulated,” Knight says. For example, companies are offering competitive compensation and perks, using multiple recruiting channels, developing internal programs which position themselves as preferred employers, offering clear advancement options and pathways, and forming partnerships to work with Aboriginal peoples, youth and immigrants.

The report also offers recommendations for consideration by industry, government and education. These range from promoting the lifestyle and community offerings of the region, mitigation of inter-provincial tax differences.

“We hope this report helps present the changing national dynamics of Canada’s growing oil and gas industry,” says Knight.

Our goal is to help both industry and Canadians understand and respond to workforce needs across the country,” she explains.

Effective April 1st, 2013, the Petroleum Human Resources Council of Canada became part of Enform Canada. The council is the primary resource to address workforce development and labour market issues in the Canadian petroleum industry.

Funding is provided in part by the Government of Canada and the Saskatchewan Ministry of the Economy.

For media inquiries: Rowena Sampang Senior Advisor, Marketing and Communications Email: Rowena.Sampang@petrohrsc.ca Tel: 403-516-8145 FOOTNOTE 1

http://www.petrohrsc.ca/document-list.aspx w

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Magnalight EPL-LP-24-LED explosion proof fixture.

LEDs offer higher performance and cost-effective oilfield illumination Aggressive pursuit of U.S. oil reserves,

expansion and demonstrates the speed

Much of the challenge associated with

thanks to new oil extraction technologies

at which all of this growth is occurring.

developing Bakken comes in the form of

such as shale extraction and a federal

Of course, along with this increase in

maximizing extraction while maintaining

impetus to reduce dependency on

field development has come a matching

safety and the cost-effectiveness of oilfield

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explosion of growth within domestic

capabilities. In order to continue this

extraction technologies created (such

oilfield development industries.

increase in production and develop as

as “fracking”, gas and water injection,

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much of the potential these resources

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in North Dakota are seeing strong and

hold as possible, new development

limelight during this latest production

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and facility technologies are likely

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their efforts to develop these sources

play a large role, as well. It is probably

are helping to make the oil production

of domestic oil and natural gas. In 2011,

well, then, that this boom in U.S. oil

process more efficient and cost-effective.

the number of active wells in the Bakken

production is taking place just when

The facilities and platforms associated

was at 5,216. In 2013, that number

the technologies needed are coming to

with the oil extraction process, for

now stands at 8,506. This is significant

fruition.

example, commonly operate on a 24-hour

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schedule, and this means illumination technologies will also play a critical role in how safely and effectively an operation performs.

In the past, the most common form of illumination used at large drilling rigs, pumping units, and transport stations consisted of HID lighting systems utilizing metal halide and high pressure sodium luminaries, for instance. These types of lighting systems have been popular due to their relatively high-efficiency and intense-output capabilities. However, these HID systems have several caveats that have served to temper their overall reliability and cost-effectiveness. The primary issues with HID systems used within the oil production process

involve their durability and reliability and the serious problems that can arise when these systems fail. In order for production to continue unabated during nighttime hours without increasing the risk to workers or the facility, lighting systems must be capable of providing the necessary illumination, at the proper levels, at all times. When these systems fail or malfunction, they must be serviced and repaired immediately; thus production can be significantly impacted as downtime and slowdowns are incurred while servicing is performed. Additionally, excessive failure rates also drive operating costs upward, negatively impacting the cost-effectiveness of an operation.

Because of the abusive environmental and working conditions associated with oilfield development, lighting system reliability is a serious concern as these

systems are subjected to a host of stresses, ranging from heavy vibration and impacts caused by running machinery to wet conditions and heavy dust and dirt accumulations. Additionally, due to the hazardous nature of petrochemicals and the extreme danger of fire and explosion their presence creates, lighting systems must be specifically tailored to work within such hazardous environments.

This poses additional problems for HID lighting systems, as these types of fixtures tend to run quite hot and contain glass bulbs which can shatter, break, and even explode when exposed to excessive stresses. Lighting used in the petroleum industries generally requires explosionproof certification in order to be safe for use in oil production environments, which also serves to increase the outright cost of this lighting, as well as the costs

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associated with lighting system repair and maintenance. Fortunately, today’s newer technologies also include new forms of lighting which promise nothing less than a revolution in how we illuminate oil production facilities. Primary among these new types of lighting technologies are LED-based systems, and the potential

improvements over traditional HID lighting systems they offer are nothing short of amazing.

Some of the more common fixtures utilized in large production facilities include metal halide high bay light fixtures. These are high-output units that as their name implies, are situated high

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above work spaces in order to provide effective illumination of large areas.

Although effective, these fixtures are costly and difficult to maintain due to their construction design and location within the facility. In addition, they are typically explosion-proof certified, all of which normally necessitates the use of third-party maintenance companies to safely and properly maintain their operation. These metal halide fixtures tend to shift the color of their light output from white to pink as they age, thus reducing their effectiveness, and as they near the end of their service life, at around 20,000 to 25,000 hours of operation, they can begin to cycle on and off uncontrollably. Making matters worse, metal halide fixtures also utilize ballasts, and should the fixture be allowed to continue operating past the bulb’s rated service-life, the ballast can be seriously damaged. All of this adds up to a fixture that although effective, can be costly to operate because of high-maintenance requirements that can potentially create issues with downtime and reduced productivity and workplace safety due to frequent failures.

However, leading manufacturers and suppliers of industrial lighting equipment, such as Larson Electronics’ Magnlight, now offer explosion-proof lighting alternatives that almost completely eliminate the issues associated with HID and metal halide systems. Their EPL-HB-150LED-RT High Bay LED fixture, for instance, uses far less power than a 400-watt metal halide fixture—yet can illuminate approximately the same amount of space. These fixtures also contain no ballasts, experience no color shift as they age, have no glass bulbs, run cool, and have a service-life rating of 60,000 hours—up to three times that of the average metal halide. All of this makes this explosion-proof fixture far more cost-effective and more reliable to operate over the long term. They use less power, require less servicing, and

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are not prone to the sudden failures and malfunctions an HID system can typically experience… all of which of course adds up to reduced maintenance costs and steadier and safer production operations through reduced downtime.

LED-equipped light fixtures can be applied across a wide range of field operation applications as well, and in fact are more versatile than HID systems.

Magnalight’s EPL-LP-24-LED explosionproof fixture looks and installs the same as a typical two-foot-long explosion-proof fluorescent light fixture. Being equipped with LEDs, though, means it will last far longer, withstand greater abuse, use less power, and be far more durable and reliable than a typical fluorescent lamp assembly. Portable applications benefit from LEDs as well, and Magnalight’s EPL-16C-1MLED LED Tank Light really demonstrates this versatility through its cart-mounted mobility and its ability to be operated just about anywhere (including within tanks and transports, where the only access is through a 24-inch manway opening); yet it’s powerful enough to illuminate over 10,000 square feet of workspace.

LEDs can also be adapted to largescale outdoor tower illumination as well, and are particularly effective for mining and construction applications where durability, high power, and low energy consumption is important for safe operations and long-run times with limited power supplies. Magnalight’s PLM30-R 30 Foot Pneumatic Light Masts are well-suited to large-scale outdoor lighting tasks, are ideal for mounting to mobile platforms, and can be fitted with a wide array of their heavy-duty LED fixtures.

These masts are raised and lowered with compressed air provided by an included compressor, and are an ideal way to elevate multiple LED fixtures in order to provide maximum coverage of large-scale outdoor operations.

Overall, LEDs offer companies in the oilfield development industries an excellent way to improve the performance of their operations while also reducing the costs associated with them. Illumination plays an important role in production, and in order to maintain productivity around the

clock, must be maintained at optimum operating levels. By utilizing LED fixtures in place of older HID systems, operators can realize lower operating costs, reduced downtime, improved light quality, and less frequent maintenance intervals that all combine to improve bottom-line profitability. w

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haws corporation

AXION MSR Medically Superior Response®: the first, and only, wash-head specifically designed for the human eye The emergency shower and eyewash industry has been in existence with sporadic efforts since the 1930s, with contemporary “steady stream” configurations generally coming on line during the 1950s. Urban legend has it that the first “steady stream” eyewash was devised by an industrial plant manager. He was so concerned about his employees’ welfare that he adapted the use of two drinking fountain bubbler heads mounted on opposing sides of a sink. When activated, the streams formed a double arch that aimed water from the outer perimeter of the sink to the center.

An injured victim would place his/her

face into the double streams and irrigate both eyes simultaneously. It was a great concept and one that took the safety industry to a new level over the ensuing 50+ years.

However, is has been found that irrigating with streams that contact the eye at its outer canthus, or corner, and flow inward toward the nose is diametrically opposed to the way healthcare professionals irrigate eyes— and for good reason!

The medical profession teaches and practices irrigating eyes by introducing the flushing fluid at the inner corner of the eye—adjacent to the nose—and letting

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it run across the eye to the outer edge.

In effect, doctors irrigate eyes by moving the fluid away from the lacrimal puncta, which are the ocular cavity’s drains. These drains channel excess fluids (including hazardous substances accidentally splashed into the eye) directly into the nasal cavity where they can be swallowed or inhaled. The medical best-practice for eye irrigation is actually opposite the flow direction of traditional plumbed-in eyewash products.

To address this situation, Haws Corporation® recently introduced the first and only eyewash and eye/face wash-head that is specifically designed to operate in concert with the natural function of the human eye.

The AXION MSR™ eye/face washstreams are inverted versus the traditional eye/face wash. Streams contact the eyes at the inner canthus, or corner, adjacent to the bridge of the nose. Contaminants are swept to the outer edge of the eye, where gravity takes over running them into the eyewash bowl. Also, because the AXION MSR streams are almost vertically oriented, this design is engineered to “stall” at the prescribed height. When the stream exhausts its vertical velocity, it softly turns outward and begins to fall off horizontally. This action causes a slight puddling of the flow in mid-air before it returns to the eyewash bowl; this stalling, puddling and soft horizontal flow occur

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directly at the optimal contact point with the eye, making for a more pleasant and effective irrigation experience. And, this entire action minimizes the possibility of contamination entering the lacrimal puncta.

This best-practice design falls in line with medical protocols as well as in-plant emergency response efforts. The design and utilization of the AXION eye/face wash is now going to be broadened as Haws introduces the AXION Advantage®. When released, the AXION Advantage® will give safety decision-makers the ability to advance their existing emergency equipment to the best-in-class, while not sacrificing existing ANSI compliance. AXION Advantage® is the answer to upgrading most existing eye/face washes and combination units to AXION MSR technologies.

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border states electric

Border States:

Here for the long haul

Border States employees regularly volunteer to support food banks in the region.

Border States has been providing the materials needed in the oil and gas patch for years. From Alaska’s Prudhoe Bay to the West Texas Permian Basin, our industry experience and market diversity make Border States a powerful supply-chain partner.

Through the ups and downs in the Bakken oilfield, we have built solid relationships with long-standing customers by providing the materials and technical expertise needed to keep their electrical and automation systems up-and-running. Along with our industrial automation capabilities, we offer products and services for industrial MRO and supply, electric and natural gas utility, electrical construction, data communications, and industrial PVF. Our services are tailored to meet our customers’ needs. When faced with insufficient manpower and getting material on site, we provide job-site 116

BAKKEN OIL REPORT – FALL 2013

Border States’ job-site trailers help customers increase productivity and reduce labor costs. trailers to ensure our customers have the material when and where they need it. Job-site trailers keep material secure and protected from the weather. And, by ensuring crews have the material they need at the job site helps our customers increase productivity and reduce labor costs.

When one of our customers needed to provide Internet and telephone connectivity into a drilling site, our

data-communications team developed a solution that provided both voice and high-speed Internet wirelessly from the customer’s closest existing telephone cable. An especially unique part of this solution is that all of the equipment is powered remotely via the existing telephone cable. Even with the hills and rough terrain of the Bakken oilfield, we managed to create a workable and redeployable solution.

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Border States coordinated local collection efforts to assist the Red Cross in purchasing much-needed equipment and supplies for western North Dakota.

Weâ&#x20AC;&#x2122;ve also teamed up with our automation vendors to provide training for our oilfield customers. Featuring hands-on labs, these training sessions provide the opportunity to work on variable frequency drives, programmable logic controllers and operator interface highlighting applications used in the Bakken oilfields. Other training sessions focus on a variety of topics ranging from safety and security to improving productivity through mobile and online training.

But, itâ&#x20AC;&#x2122;s not just about being a great supplier. Through boom, bust, and boom again, we are also a good neighbor. When the Red Cross needed to purchase a critically needed vehicle, trailer and first-aid supplies for western North Dakota and was looking for help, they came to us. To respond to their need, we worked with our key customers in the area and raised more than $56,000 toward the purchase of the needed items.

The shale energy-related activity and the challenges that have followed continue to drive our company to find innovative products and logistical solutions for our customers in the region. To match the demand from our customers and expand our ability to serve them, we recently built new facilities in Dickinson, Minot and Williston, North Dakota.

We look forward to continued growth and success in this area. With unmatched local sales, inventory, and service to our customers, we will be there with the tools, technology and knowhow to help our customers successfully meet their business goals. w 118

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mbi energy services

MBI Energy Services expands oilfield services to meet demand

By Lisa Fattori

MBI hot oil truck.

In the last six years, MBI Energy Services has grown by leaps and bounds, providing oil and gas companies with an extensive range of services to support field operations.

Founded in 1979, the company was formerly known as Missouri Basin Well Service. As Missouri Basin Well Service, the company became a well-established supplier and industry leader in oilfield services long before the current Bakken oil boom. MBI Energy Services has the experience and expertise necessary to provide hauling and other trucking services, as well as oilfield support services for turnkey solutions that meet all of their customers’ needs.

“MBI started out with just one truck, and now has over 1,000 trucks, 20 wireline trucks, 18 workover rigs and 125 rig fleet workers,” says Dave Wanner, part owner and secretary/ treasurer for MBI Energy Services. “The company has grown tremendously, and currently has over 1,500 employees, which includes four subsidiary companies that were purchased in 2012. MBI Energy Services has been around a long time and our customers appreciate that. We have over 33 years of experience in the oilfield industry as a full-service company with leading field and administrative safety programs.”

Headquartered in Belfield, North Dakota, MBI Energy Services has eight North Dakota locations to service the Bakken oilfield. MBI services several major customers, including Marathon, Hess, Whiting, and Conoco Phillips. The company has also expanded into other oil shale plays to serve those 120

BAKKEN OIL REPORT – FALL 2013

MBI sand truck.

markets. With three locations in Wyoming, two in Pennsylvania, and one to service the Eagle Ford oilfield in Texas, MBI Energy Services strategically situates its locations to offer customers greater convenience and a heightened level of service.

MBI’s large trucking fleet is equipped to transport oil, sand and water, along with other oilfield products. The company also owns and maintains a vast number of the area’s salt-water disposals and fresh-water wells needed for oil-well drilling and production. Trucking services include drill-mud hauling, flatbed transport, winch trucks, hot-oil trucks and super-vac trucks.

MBI Energy Services provides ancillary well-site services consisting of drilling-related fluid storage and transfer, drilling-related solids containment and well control assets.

The company also has crews to complete general wellsite construction and maintenance, as well as construct tank batteries. A wide range of fluid management and environmental services include fresh-water sourcing and hauling, on-site frac water transfer and frac water storage, produced and flowback water hauling, various disposal services, drilling fluid hauling and disposal, and oil inventory management and hauling.

Purchased in 2011, MBI Energy Services’ subsidiary, High Plains Inc., offers well completion and intervention services with a fleet of 20 wireline trucks and cranes equipped with the latest technology and tools. The MBI family of companies includes MBI Oil and Gas LLC, which was formed in 2008

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mbi energy services

MBI workover rig at Frank’s Creek.

with three employees. Today, the company has expanded operations with additional local technical personnel. Last year, the company opened an office in Denver, Co. Recent acquisitions give MBI Energy Services the breadth of expertise to handle all aspects of oilfield services.

Williston-based Yankee Fishing and Rentals Inc. rents blow-out protectors, closing units, power swivels and laydown equipment. In addition, the company provides cased-hole fishing services. Midwest Crane Service in Belfield, N.D. assists in setting up pumping units, tank batteries and wellhead buildings. The company has picker trucks with 23-ton cranes, as well as hydraulic crane services for 65- and 80ton cranes.

The newest company to join MBI Energy Services is Rod’s Hot Oil Service Inc., based out of Dickinson and Watford City, N.D. The company specializes in hot oil services and can pressure test up to 10,000 psi with recorders.

“These new acquisitions enable MBI to extend our expertise, and provide customers with much more than hauling services,” Wanner says. “Each company 122

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complements MBI Energy Services’ core business and plays a key role in meeting the needs of our customers.”

As experts in the transportation of oil and oilfield-related products, MBI Energy Services has a vested interest in helping oil and gas companies with timely access to profitable markets. The company has actively partnered with railroads, investing in rail infrastructure in Minot, Beulah and Ross, N.D. With approximately 50,000 barrels of oil leaving the Bakken each day, a more robust rail service can keep pace with MBI trucks, unloading tanks of crude oil to rail for transportation to various markets.

MBI Energy Services’ investment in the future extends to improving efficiencies through automated systems.

The company’s $4-million investment in TMW fleet and transportation management software, as well as PeopleNet, has helped automate its load process. The company is now able to provide electronic logs for drivers, and allow integrated electronic dispatch to send load and other information to drivers. In addition, MBI can dispatch more trucks with fewer dispatchers and

cut down phone usage. Since switching to electronics, MBI is able to report to its customers within three days instead of 45 days. TMW and PeopleNet allow more accurate reports and customer information, and enable MBI to track its drivers in case of an emergency.

Customers of MBI Energy Services can also be assured that they are dealing with a company that has an impeccable health and safety record, with an industry-leading field and administrative program that monitors all equipment and drivers. A dedicated staff of 90 employees in the health, safety and environmental departments manages the company’s stringent policies. MBI’s safety principles include Personal Injury Prevention (OSHA), Minimize Waste Management (EPA), Minimize Environment Impact (EPA), and Driver and Equipment Compliance (DOT).

Job candidates undergo jobcompatibility screening and, upon being hired, receive one week of classroom instruction. New hires also shadow a driver trainer for up to four weeks of on-the-job training. Employees receive specialized training (JSA & H2S), as well as fitness training. MBI provides employees with competitive pay, excellent benefits and family company events. Drivers are paid by the hour, rather than by the load or mile, in order to promote safe driving so that they are not rushed and are able to work safely.

Given the incredible growth of the Bakken oil industry in recent years, filling positions continues to be a challenge, but MBI Energy Services’ reputation as a premier employer attracts the best in the industry.

“Growth presents its own challenges, such as finding qualified people to hire,” Wanner says. “But growth is a good thing. It’s very rewarding to see the company grow and to see all of our employees succeed.” w

MBI Energy Services has been providing safe and reliable oilfield solutions

since 1979.

(701) 575-8242

www.mbienergyservices.com

kLJ

KLJ nationally recognized on Top 500 Design Firms list BISMARCK, N.D. –KLJ, a multidisciplinary engineering and planning firm, announced in May 2013 that the company has been recognized as one of the nation’s Top 500 Design Firms by Engineering News Record (ENR). “This is an outstanding achievement for KLJ and evidence that we are positioned well strategically and have a great team who will continue to lead us to future successes,” said Niles Hushka, CEO. The Top 500 Design Firms list, published annually in April, ranks the 500 largest U.S.-based design firms, both publicly and privately held, based on designspecific revenue. Companies engaged in general contracting specialty contracting,

MARKETING

disciplinary engineering-based solutions for national, large-scale operations, with the local expertise to drive projects forward and deliver successful results.

As an employee-owned firm with a focus on innovation and hard work, KLJ helps clients succeed by developing lasting infrastructure that responds to the social, civic and economic needs of their communities. KLJ currently has 18 office locations throughout North Dakota, South Dakota, Minnesota, Montana and Wyoming. For more information about KLJ, visit www.kljeng.com.

Media contact: Jill Furaus, Communication Coordinator, KLJ 701 355 8723 w

engineering, architecture, planning and studies are ranked through an annual survey. The rankings are then divided into specific market categories.

KLJ was ranked 16th in the nation for telecommunications, as the 76th-largest designer in the United States and as the 110th-largest firm in the United States.

The rankings established KLJ as the highest-ranked firm that originated in the region.

“The accomplishment is a great way to begin our 75-year anniversary. We have taken calculated risks which have proven to be successful, and we will continue to be a leader in the industry,” Hushka stated.

Since 1938, KLJ has provided multi-

DESIGN/BUILD

OWN

OPERATE

AE2S Water Solutions Freshwater Delivery Pipeline System Conveys Water to Temporary Storage Reservoirs at Pad Sites Southeast of Watford City

WATER

SOLUTIONS

www.ae2swatersolutions.com

124

BAKKEN OIL REPORT – FALL 2013

Project Development and Marketing Land Services/GIS/Mapping Water Sourcing Fresh Water Delivery Systems Water Reservoirs/Storage

Water Treatment/Recycling/Reuse Produce Water Collection Systems Salt Water Disposal Controls/Programming Operations

NATIONAL PERSPECTIVE. REGIONAL EXPERTISE. TRUSTED ADVISOR.

KLJENG.COM

For 75 years, KLJ has worked in the oil and gas industry throughout the Bakken.

We offer more than 100 services to support exploration and development.

BAKKEN OIL REPORT – FALL 2013

125

wanzek construction

World-class Wanzek Construction at the forefront of technology in the Bakken

The Bakken is continuing to grow and expand due to technological advancements in the drilling industry, which equates to more production and a need for additional

714 Center Street | Deer Park, TX 77536

Tel: 281-241-8414

www.frdepot.com 126

BAKKEN OIL REPORT – FALL 2013

pipelines, gathering systems and storage capacity to bring the product to market. Wanzek is focusing on mid-sized to large turnkey construction projects in the Bakken while simultaneously servicing accounts by providing daily maintenance and roustabout services on-site.

Wanzek has observed that the oil and gas market is reacting to heavy drilling operations over the past several years, resulting in increased midstream activity—both in transportation and storage. The company has historically been capable of adapting and evolving around new trends.

“We are always looking for new ways to generate business and expand upon our core competencies,” says Matt Buchanan, business development manager with Wanzek. “We continue to adapt by diversifying our services across multiple revenue streams, including areas outside of the oil and gas sector.” These changes include new processes and services in the field, as well as implementing new software and reporting tools that allow Wanzek to perform more efficiently.

It is the objective of Wanzek to continue to be at the forefront of technology and a construction leader in the industry.

With innovation in mind, Wanzek is shifting gears slightly to accommodate for the growing oil and gas business sector. Buchanan says Wanzek understands the importance of building on a solid foundation by strategically adding business development support from the corporate level, and striving to support sales efforts with experienced and qualified field support. “Our projects are only as good as the people we have on the ground and in the office supporting every aspect of the job. Looking ahead, we are

wanzek construction

working hard to reconnect with past clients to re-open lines

complex near Tioga, N.D. This housing facility boasts a

of communication and build upon those relationships,”

variety of lodging options for workers in the Bakken oilfield

Buchanan states.

area, and their fully-furnished trailers create a comfortable

Wanzek’s core competency surrounds midstream

home complete with well-equipped living quarters and

construction projects including compression and pump

leisure facilities.

stations, storage terminals, loading and unloading terminals

Each living trailer is outfitted with a 40-inch television, a

and general O&M services.

DVD player, satellite service, wireless Internet, and kitchen

Wanzek’s people are the most important asset. Wanzek

appliances—of of which make comfortable temporary

not only offers standard industry-level training for team

housing possible. Each resident receives access to a

members, but also encourages staff to cross train in different

community lounge area, computer café, exercise room, and

specialties. Wanzek has also incorporated a behavioral-based

billiards tables. Wanzek’s facilities are well-maintained and

safety program, and has empowered all levels within the

all areas are regularly cleaned. Wanzek’s goal is to provide

organization to be able to stop the project or task if there

oil crews and affiliated workers with comfortable and safe

is a safety hazard. This level of project ownership, shared

living quarters.

throughout the entire organization, has given all team

Wanzek is excited about the changes in the Bakken area

members the intangible skill of being able to take ownership

and with their recent additions in the field and in the office,

of that site and its safety culture.

the Wanzek oil and gas team expects to see substantial

Growth in the oil and gas industry has created a need to

growth in the midstream and downstream sectors that

attract qualified workers and provide housing in the Bakken.

will further cement Wanzek’s reputation as a world-class

Wanzek has accordingly constructed a 179-lot housing

contractor. w

► ► ► ► ► ► ► ► ► ► ► ►

Hot Shots & Trucking Drill Bits Super Vac Truck Pipe Racks Stabilizers & Reamers Bed and Winch Truck P.S. Mud Motors Breakout Machine Float Equipment Welding & Fabrication Pipe Straightening Rental Equipment

BAKKEN OIL REPORT – FALL 2013

127

What retirement future will you create with your big oil industry wages?

Special to the Fall 2013 Bakken Oil Report by Dr. Harold Wong

The Bakken oil boom has revitalized North Dakota. For decades, young people have left the farms and small towns for other states in order to find work. Now, we have a reverse migration, with N.D. folks moving back and non-native N.D. folks coming to work at high-paying jobs in the oilfields.

For example, in Tioga, located in Williams County, N.D., the median household income was $29,740 in 2000.

In 2009, it jumped to $60,664. Since 2009, there has been a 66 percent estimated growth in weekly pay. That would bring the current median household income to $100,702 in Tioga. In contrast, the U.S. median household income was $50,502 in 2011 and $51,144 in 2010.

Many jobs pay $80,000 to 100,000 in annual wages, or even more. A real-estate developer told me that a waitress at a well-known restaurant in Williston earns $6,500 per month and much of that is cash tips. In addition, the restaurant provides her housing. A truck driver who moved from Mesa, Arizona to N.D. drives for MBI. He told me he earned $109,000 in his first year in N.D. and will earn $133,000 in 2013. Let’s now look at what you’re going to do with all this money, and what the long-term consequences

k Portables , Da

LL

C

Mo n

are. Here are two possible scenarios:

• You’re a young guy and you spend all of your income. You buy a new four-wheel-drive pickup truck for $50,000. You buy the newest, fanciest hunting and fishing equipment and go on guided trips. You know there are probably at least 50 guys in the oilfields for every really attractive single girl. So, you try to compete by spending lots of money on her. If you’re lucky, you have a good time for two to three years before you breakup and you’re broke.

If you’re not lucky, you got married and in five years, you’re divorced and paying alimony and child support for your two children. By the way, childsupport does not stop until the kids are 18, and if there’s a provision in the divorce agreement that requires you to pay their college expenses, not until they are 23. Now, you’re broke for the next 13 to 18 years.

Note: 50 percent of first marriages, 67 percent of second and 74 percent of third marriages end in divorce, according to Jennifer Baker of the Forest Institute of Professional Psychology in Springfield, Missouri.

• You’re a middle-age guy, age 50, from out-of-state who lost everything during the last 12 years.

We had two stock-market crashes

Office: 701-859-4662 | Fax: 701-859-3662 | Email: mondakportablesllc@yahoo.com

www.mondakportables.com

Williston, ND 701-770-2299

Servicing North Dakota and Montana Employees:

Oil Field Trained • OSHA Certified Drug Tested Services: Oilfields • Construction Sites Events • Hand Washing Stations

128

BAKKEN OIL REPORT – FALL 2013

including the dot-com bust of 2000-2002 and the 2008-2009 stock meltdown, where the stock market lost 54 percent from the high of October 9, 2007 to its low of March, 2009. Since then, the stock market has recovered all of its losses and set new all-time highs, but if you got out of the market at the lows, it didn’t help you.

You also lived in Arizona, California, Florida, or Nevada, where the average house price dropped by over half from its highs in 2006 to its lows in 2011.

You either lost your house or are barely hanging on. You and/or your wife lost your jobs due to the Great Recession, where over eight million jobs were lost.

You came to N.D. and now have a high-paid job. Over the next seven to 10 years, you pay off a mountain of prior credit card bills. After two to three years, you qualify for a mortgage and buy a house at the high oil boom prices. You move your family to N.D. You buy two new vehicles, furniture, a big-screen TV, and a boat. You set some money aside for your teenagers’ college bills. You pay back loans from your parents that kept you alive when you were down and out. You crawled out of an economic hole and now have a middle-class life.

Hallelujah!

However, if you are only an average saver, you will not be prepared for a comfortable retirement. Personal savings in the United States decreased to 4.40 percent in June of 2013 from 4.60 percent in May of 2013. Personal savings in the United States is reported by the U.S. Bureau of Economic Analysis (BEA).

The United States Personal Saving Rate averaged 6.86 percent from 1959 until 2013, reaching an all-time high of 14.60 percent in May of 1975 and a record low of 0.80 percent in April of 2005.

The Personal Saving Rate corresponds to the ratio of personal income saved to personal net disposable income during a certain period of time. Disposable income is the amount of money that households or persons have available to spend and save after paying income taxes and pension contributions (such as Social Security) to the government.

Conclusion: Be thankful that you have a high-paid job in the N.D. Bakken oil boom. However, if you only save $3,520 (4.40 percent of your $100,000 income minus $20,000 of Social Security taxes, federal and N.D. income tax), you won’t have enough for a comfortable retirement. It will be a shock when you find out that the average person who takes Social Security at age 62 only receives about $1,000 a month.

A Better Financial Solution is Old-fashioned Savings Suppose you are a worker, age 50, and you earn $100,000 in wages. Suppose you decide to maximize the 2013 allowable contribution to your 401k, which is $23,000 for someone age 50 or older. Your employer adds $3,000 as his 50 percent match (up to your first $6,000 of contributions). Now you have $26,000 saved. If you do this each year for 10 years, and earn an average five percent per year, you will have $343,376 at age 60.

Then you deposit $250,000 into a private pension plan and let it grow for 10 years. A private pension is normally not invested in the stock market and that’s why you can’t lose principal.

At age 70, you will have $28,391 of annual income each year that you live. By waiting to take Social Security retirement benefits until age 70, you receive the maximum. It should be around $35,000 per year. Now your total retirement income is $63,391.

From age 60 to 70, if you save the same $26,000 per year and earn five percent, you will have another $343,376 of savings. You will also have the other $93,376 of savings earning for the next 10 years. If you earn five percent per year, this will become $152,099 by age

70. Add $343,376 plus $152,099, and

About the

your total savings nest egg is $495,475.

Author: Dr.

Conclusion: By deciding to maximize

Wong earned

your annual contribution to your 401k

his Ph.D. in

plan, and working until 70, you will

Economics at

have an annual $63,391 retirement

UC Berkeley and

income plus $495,475 of savings. OR

passed the CPA

you can decide to not follow this path

exam in 1979.

and retire at age 62 with only $1,000 of

He has educated

monthly Social Security and $58,829 of

thousands of attorneys, CPAs, realtors, and

savings ($3,520 per year saved from age

investors. You can contact him at: (480)

50 to 62 and earning five percent per

706-0177; haroldwong1@yahoo.com; or

year). The choice is yours!

www.drharoldwong.com. w

SERVING THE OIL AND GAS INDUSTRY SINCE THE DISCOVERY OF ELK BASIN ENERGY ATTORNEYS KIMBERLY BACKMAN KALEN K. BIORD BRIAN R. BJELLA COLBY L. BRANCH GARY G. BROEDER CRAIG B. BURNS JOSHUA COOK JON DYRE CHRISTOPHER D. FRIEZ JOHN L. GALLINGER SHANE A. HANSON KEN HEDGE BRIAN HOLLAND

KRISTIN BJELLA HOW BLAINE JOHNSON ALICIA D. KISLING ARTHUR F. LAMEY, JR. JOHN R. LEE TIMOTHY LERVICK DENISE D. LINFORD MOLLY A. LITZEN CHRIS MANGEN, JR. WADE C. MANN LORI A. MCMULLEN LOUIS R. MOORE JOHN W. MORRISON

JENNIFER M. NASNER ADAM OLSCHLAGER JEFFREY OVEN URIAH PRICE FRED C. RATHERT P. JAYE RIPPLEY STEVEN RUFFATTO CRAIG C. SMITH GARTH SJUE MARK STERMITZ

CHRISTOPHER C. STONEBACK

NEIL WESTESEN

BILLINGS 490 North 31st Street Suite 500 Billings, MT 59101 Phone: (406) 252-3441

BUTTE 65 East Broadway Suite 503 Butte, MT 59701 Phone: (406) 533-6892

MISSOULA 305 South 4th Street E. Suite 100 Missoula, MT 59801-2701 Phone: (406) 523-3600

BISMARCK 400 East Broadway Suite 600 Bismarck, ND 58502 Phone: (701) 223-6585

CASPER 152 North Durbin Street Suite 220 Casper, WY 82601 Phone: (307) 265-2279

SHERIDAN 101 West Brundage Street Sheridan, WY 82801 Phone: (307) 673-3000

BOZEMAN 45 Discovery Drive Bozeman, MT 59718 Phone: (406) 556-1430

WILLISTON 1331 9th Avenue Williston, ND 58801 Phone: (701) 572-2200

CROWLEYFLECK.COM BAKKEN OIL REPORT – FALL 2013

129

mi-t-m corporation

Performance under pressure

Mi-T-M Corporation is an example of an American manufacturing success story. A.J. Spiegel, chairman and chief executive officer of Mi-T-M, founded the company in 1971 to produce cold-water pressure-washers for the paint industry.

Spiegel may have started the company by selling 1000 PSI pressure-washers out of his truck, but over the years Mi-T-M has grown to become a company recognized worldwide for its commitment to excellence in engineering design, manufacturing technology, quality control, and customer care. Mi-T-M now manufactures both hot and cold water pressure washers, portable generators, air compressors, portable heaters, wet/ dry vacuums and other products for the professional contractor.

The small town of Peosta grew up around the company’s expansive facility where Mi-T-M is a key employer of over 350 dedicated workers. In the ’80s, the population of this Iowa town 130

BAKKEN OIL REPORT – FALL 2013

barely hit 100; today the population is nearly 1,400 and growing!

Situated at the crossroads of Iowa, Illinois, and Wisconsin, Mi-T-M recently assisted several Gulf Coast states, ramping-up production of generators and other equipment in response to Hurricane Isaac.

“Because of our manufacturing process, we are able to switch all production lines to the assembly of hundreds of gaso¬line-powered generators, literally within hours. Add that to our inventory reserve for just this type of situation, and our reaction to our customer’s needs is remarkable.

We shipped hundreds of generators south in a very short timeframe,” says Dana Schrack, vice-president of Mi-T-M. Spiegel’s entrepreneurial drive is as strong today as it was in 1971.

He is always open to opportunities that will grow the company. In 2007, Mi-T-M introduced the combination air compress/generator series as a

compliment to the already established air compressor and generator product lines. This unique tool has been popular with contractors who appreciate the efficiency of one piece of equipment doing the work of two.

And in 2011, Mi-T-M began manufacturing the combination air compressor, generator, and welder.

“This machine is also an excellent addition to the oil and petroleum industry,” states Schrack. “It features a Subaru 404cc OHC engine, a 30-gallon two-stage air compressor, a 5,000-watt generator, and a 170A arc welder.” In 2013, Mi-T-M expanded this category by adding a Honda-driven model featuring a 688-cc OHV engine, a twostage air compressor, a 5,000-watt generator and a 220-amp arc welder.

“Whichever model you choose, you’ll find it is the perfect tool when you need the support of all three machines, but may not have the floor space for all three,” states Schrack.

As a long-time supplier to the oil & gas industry, Motion Industries provides a wide range of products and services to support all your industry needs from drilling to refinery. This includes new and innovative products designed specifically for the oil & gas industry. And, because we have relationships with the suppliers you prefer, rest assured that you get the products you count onâ&#x20AC;Śwhen you need them.

And Motionâ&#x20AC;&#x2122;s fully qualified technical experts are ready to provide the repair, fabrication and product modification services you need. Whether you need help with electrical, fluid power, hose, belting, process pumps, mechanical, or mill services, our service centers utilize the latest testing equipment available.

Whatever your application, Motion Industries has the products and services to keep your industrial site in motion.

Follow us on facebook.com/MotionInd

mi-t-m corporation

Mi-T-M 2000 PSI hot water pressure washers.

Mi-T-M Corporation also understands the importance of protecting the environment through water conservation and developed a wide selection of state-of-the-art water treatment systems over the years.

One of the most prominent and wellknown sources for reports on current trends, economic outlooks and world affairs, The Kiplinger Letter, named MiT-M Corporation among the leading manufacturers of water recycling technology in 2007. And, today MiT-M continues to develop product in response to the recent severe droughts that effect water conservation.

In the past 41 years, Mi-T-M has worked hard to develop a reputation for the best equipment in the industry and manufacturing high quality products is a top priority. “The Mi-T-M tag line, ‘Performance Under Pressure,’ communicates everything we stand for,” Schrack says. “It is who we are and 132

BAKKEN OIL REPORT – FALL 2013

Mi-T-M diesel generators ready to be shipped. what we do. It goes right to the heart of

it’s their outstanding customer service

what our customers want.”

that they’ve become known for. Mi-

Mi-T-M has set the standard when it

T-M equipment is built with pride and

comes to manufacturing reliable and

a part of each employee goes out the

dependable industrial equipment. But

door with every product sold. w

Glacier Oilfield Services, Inc. is in the business of hauling potable water and pumping septic waste. We are based in Watford City, North Dakota, and are committed to providing reliable service to the Bakken.

Call us for your water and septic needs.

Please contact Steve at 307-349-9214 or 701-300-0679.

GLACIER OILFIELD SERVICES 307-349-9214 • 701-300-0679

WATFORD CITY, ND

Why 800 Years of Experience Makes You Better at Fishing.

Experts at Vision Oil Tools have over 800 years of collective oilfield experience. Here’s why that matters to you.

Planning. Success hinges on preparation as much as execution. Veteran expertise enables us to plan each step, dress tools for optimal results and arrive with all the resources needed.

Adapting. When the unexpected happens, we know how to react. Over the years, we have seen it all and are dedicated to minimizing NPT of our clients by using our expertise and our 24/7 facilities in Williston and Dickinson.

Beyond Limits.

Executing. Your job is performed by fishing tool supervisors averaging 17 years

701-264-8935 Williston 701-483-3082 Dickinson

Isn’t it time to put all this experience to work for you?

We also have seven locations outside of North Dakota.

For details visit www.visionoiltools.com

of experience and backed by Technical Supervisors with an average of 35 years experience. That’s knowledge you can count on.

BAKKEN OIL REPORT – FALL 2013

133

beaver creek archaEology

Archaeology meets paleontology

Vega Island, Antarctica.

Beaver Creek Archaeology (BCA) is a leader in the field of cultural resource management (CRM) for the Great Plains region. BCA offers many different services, from Section 106/ NEPA compliance to Native American consultation. In an effort to better serve our clients, Beaver Creek has added paleontology to our list of services.

Archaeology and paleontology are often confused, but there are many differences between these two fields. One major distinction is that archaeology seeks to study the objects and remains left by humans, whereas paleontology focuses on life prior to human arrival. As different as these fields of study are, it is a natural fit to add the paleontology division to our company. The newly added department is headed by Ms. Amanda Cordes Person.

Ms. Person brings over twenty years of experience as a geologist and 134

BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2013

White River fossil jacket. paleontologist. Ms. Person received her

a month on James Ross Island in

bachelor of science in both biology and

Antarctica prospecting for fossils.

geology from Virginia Tech, and went

During this trip, she was part of a

on to receive her master of science in

team that discovered a previously

paleontology from the South Dakota

unknown small theropod dinosaur. In

School of Mines and Te chnology.

recognition of valuable contributions

Among Ms. Personâ&#x20AC;&#x2122;s

to exploration and scientific

accomplishments, she has spent

achievement, Person received the

beaver creek archaeology

Hell Creek fossil.

Antarctic Service Medal from the National Science Foundation under the U.S. Antarctic Research Program.

Ms. Person has spent the last five years working on the preparation of “Dakota” the DinoMummy, which is a mummified duck-billed hadrosaur.

This type of fossil is exceedingly rare, and Ms. Person is excited for the

Ammonite. opportunity to work with such a find.

“Dakota” is on display at the North Dakota Heritage Center and State Museum in Bismarck, North Dakota.

Ms. Person’s professional experience, from Antarctica to the Badlands of North Dakota, makes her a valuable addition to the Beaver Creek Archaeology family. BCA is

continuously growing, and we are proud to add the paleontology division. Ms. Person is currently the only permitted paleontologist in North Dakota working for a private company, and Beaver Creek is excited to be able to offer her expertise among our many other services. w

Experience, Knowledge, and Resources.

Providing clearing and site work services to the oil & gas industry. pandj.com • 701.572.5761 136

BAKKEN OIL REPORT – FALL 2013

Please recycle.

*Complimentary breakfast applicable with special rate

Corporate Rate Now including full complimentary breakfast

1505 N. Broadway • Minot, ND • 852-3161 Call Toll Free for Reservations: 1-800-735-4493 www.grandinternational.com

Business, pleasure, personal, or even group conferences; no matter the need, we have the facilities and staff to accommodate you.

Local Field Service on Demand Compass Compression has extensively experienced field technicians and parts available 24/7. ● Compression commissioning ● Start-up assistance ● Complete package tune-ups ● Preventative maintenance ● Field revamps ● On-site major equipment overhauls ● Operator support and training ● Refrigeration and compression optimization

Parts & Service

+1 701 509 1777

(ND, SD, WY, MT)

Package Sales

(USA)

+1 972 233 0500

www.compasscompression.com BAKKEN OIL REPORT – FALL 2013

137

veit usa

Veit: Providing innovative sitepreparation solutions for 85 years

Founded in 1928, Veit is one of the oldest and most diverse specialty contracting and waste management companies in the Upper Midwest. With around 600 employees, Veit routinely works on over 500 projects each year.

In 2012, Veit was cited by Engineering News Record magazine as the 108thlargest specialty contractor in the country, the sixth-largest contractor in terms of earthwork and foundation services, and the 19th-largest in demolition.

Veit has grown into one of the top specialty contractors serving the oil/gas and industrial sector throughout North Dakota. Our service offerings include the following: • Earthwork – Mass grading, landfill construction, contaminated soil cleanup, structural excavation, rail subgrade construction, containment 138

BAKKEN OIL REPORT – FALL 2013

liner/berm construction, hydraulic dredging.

• Utilities – Sewer, water, HDPE pipe fusing, commercial diving.

• Demolition – Total, interior, explosive.

• Foundations – Drilled piers, driven piles, retention systems, soil solidification.

Veit sets itself apart from its competitors by offering diverse services through a single point of contact. The depth of technical expertise has earned Veit a reputation for innovative thinking and the ability to solve virtually any construction site problem. Veit works smartly and safely, always following environmentally sound practices, using the most efficient techniques and advanced technology, and utilizing the most up-to-date equipment.

By approaching each project in partnership with the client, Veit is able to provide unparalleled services, resulting in

the completion of projects on time and on budget. Veit conducts detailed reviews of site conditions, client requirements, and any unique project challenges to develop site-specific construction plans that are constantly reviewed throughout the course of project.

Safety is integral to the Veit culture.

Veit’s extensive safety department includes a senior safety director, five fulltime safety directors, and administrative support who bring over 100 years of construction experience. Veit has received numerous safety awards, including the AGC of Minnesota Construction Health and Safety Excellence Award and the Meritorious Achievement Award.

Veit’s corporate headquarters are located in Minneapolis, Minnesota, with regional offices in Bismarck, N.D.; Minot, N.D.; Duluth, Minnesota; and Milwaukee, Wisconsin. w

US AGAINST THE EARTH? ODDS ARE IN OUR FAVOR. SERVING THE OIL/GAS AND INDUSTRIAL SECTOR • Earthwork – Mass grading, landfill construction, contaminated soil cleanup, structural excavation, rail subgrade construction, containment liner/berm construction, hydraulic dredging

Specialty Contracting and Waste Management

• Utilities – Sewer, water, HDPE pipe fusing, commercial diving • Demolition – Total, interior, explosive • Foundations – Drilled piers,driven piles, retention systems, soil solidification

Bismarck, ND • Duluth, MN • Minneapolis, MN

veitusa.com

Creating a culture

of safety

By Will Reedy, Vice-President, Operations, Summit Energy

A strong safety program is vital to success in the oil and gas industry: employees seek a safe workplace environment and clients demand it. Building a culture of safety requires a significant—but very important and necessary—cost. At Summit Energy, a full-service energy services company that provides comprehensive construction, maintenance and production services to the oil and gas industry, our management team has long recognized the vital role a strong safety program and culture would play in the success of the company. Our rigorous safetyfirst culture was attractive to Waste Management, Inc. (www. wm.com/index.jsp), the leading provider of comprehensive waste management environmental services in North America, which recently acquired Summit Energy to expand its environmental service offerings to oil and gas customers working in the Bakken shale formation. Health, safety and environmental concerns are at the top of Waste Management’s due-diligence requirements, and it became clear to the company that our emphasis on safety was in line with its own culture.

We have learned first-hand that safety programs alone are not enough to minimize accidents. As our safety manager Daryl Wallin says, a strong safety program needs to be more than just a library of rules and procedures outlining how to perform a task. The entire company, from the laborer in the field to the owner of the company, needs to buy into the safety program and work to create a culture of safety.

As standard protocol, we hold in-depth trainings with new employees at every level and regular bi-weekly safety trainings for existing employees. While these training sessions equip

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BAKKEN OIL REPORT – FALL 2013

employees with the knowledge and skill sets to operate in a safe manner, implementation of safe practices requires a culture of safety that we have worked diligently to establish. Our management team recognizes that safety is not something that can simply be imposed from the top down—but rather needs to be fostered by managers and employees across the company.

A strong safety program needs to be more than just a library of rules and procedures outlining how to perform a task. fefWe help foster a culture of safety by empowering every employee, regardless of level, with the authority and responsibility to notify their peers and superiors of any unsafe condition and to halt the job that is in progress until it is safe. It takes real courage— particularly for laborers—to flag to a boss that a trench is not sloped properly and demand that the team stop work. But our deeply rooted culture of safety in which everyone prioritizes the safety of colleagues ahead of anything else—including project deadlines—has enabled us to achieve an optimum level of safety.

Our managers lead daily safety meetings with their employees in the field to discuss the day’s job and employees have a chance to raise concerns they may have about the project. We’ve also created a safety committee, comprised of employees from all levels across the company, which meets monthly to exchange feedback and ideas about how to improve safety within the company. The committee also ensures that Summit follows national, regional and local guidelines and requirements, increases employee safety-awareness, builds enthusiasm for safety programs, and provides a workplace environment that is safe for employees and clients.

As Summit Energy now becomes part of Waste Management Energy Services, we look forward to working with Waste Management to continue to foster and enhance our culture of safety. We have much to learn from one another, and as we pool our resources and share best practices our culture of safety will only grow even stronger. w

THE BEST

LODGE FOR THE BEST CREW Welcome to Bakken Country. They say there’s no place like home, but we’re sure who ever coined that phrase, never visited the all new amenity filled Capital Lodge. Why not enjoy yourself with a little reward at the end of the day. Whatever you need to get ready for another challenging day, you’ll find it all at Capital Lodge.

The only one of it’s kind in North Dakota, Capital Lodge is setting the standard for accommodations in Bakken country. With it’s unrivaled amenitites, first-rate services, all the luxuries of home and then some, Capital Lodge provides your hard working crew the very best.

Lodging of obvious distinction, our facility boasts one of the largest kitchens in all of North and South Dakota, and coming soon a heated pool, Jacuzzi, and a fully-equipped gym. Who wouldn’t want to indulge in a living experience that will invigorate and relax both mind and body after a hard day’s work.

24 Hour Courtesy Officers Over-sized rooms Bathroom in every room Daily House cleaning Cable TV in every room Internet in Every room Home cooked meals daily 24 hour “Grab-n-Go” food Gym and Arcade Substantial parking Block heater plug-ins

Coming soon: work-out facility Swimming Pool & Bath area Large Game Arcade Movie Theatre Internet café Barber shop And more

BAKKEN OIL REPORT – FALL 2013

141

future pipe

All fiberglass pipes are created equal… Or are they?

By Steve Swanstrom

When it comes to fiberglass pipe

To reliably operate in extreme corrosive

present in the production stream or when

applications in a tough oilfield

conditions, the correct resin must be

CO2 is used in injection EOR applications,

environment, all pipe (and pipe suppliers)

specified by the operator.

research has shown that Aromatic Amine

may seem to be the same—but they

Future Pipe Industries (FPI)

Epoxy retains its strength much better

are not. It’s important that the producer

manufactures fiberglass line pipe, tubing,

than other resins, which can lose as much

consider more than just the diameter and

and casing in diameters up to 24 inches

as half of their strength after one year.

pressure requirements when selecting

and pressures up to 3,500 psi. All FPI pipe

The effect of CO2 on the resin is similar to

pipe for a specific project. Sometimes

is manufactured using Aromatic Amine

that of a solvent attack and can rapidly

the project service conditions warrant

Epoxy Resin because it provides the

reduce pipe strength, except with the

consideration of the type of resin that is

greatest mechanical strength and the

superior results provided by Aromatic

utilized in the manufacture of fiberglass

ability to withstand the toughest types of

Amine Epoxy. As oil wells mature, it is not

pipe. The three common resins that

corrosive service—including the highest

unusual for production temperatures and

are utilized are: Aromatic Amine Epoxy,

temperatures and the most aggressive

the levels of corrosion to increase; thus,

Anhydride Amine, and Aliphatic Amine.

fluids in the industry. Further, when CO2 is

by making the correct specifying decision

Lignite, ND

|

Tioga, ND

PortalServiceCompany.com

HG Pumping Unit Sales Oilfield Services & Pipeline Construction Manlift & Light Plant Rentals 142

BAKKEN OIL REPORT – FALL 2013

Doug Johnson 701.570.1566

future pipe

up-front, the pipe will provide greater reliability in the future.

Typically, all fiberglass pipe manufacturers can provide pipe manufactured with any of the three resin choices. Certainly Anhydride and Aliphatic resins have their place in the industryâ&#x20AC;&#x201D;but they are best utilized in more benign operating conditions.

The cost to produce Aromatic Amine products is a little higher due to the longer heat-cure times but the cost difference is insignificant when compared to overall project costs. All FPI fiberglass pipe is heat-cured in ovens for up to four hours for consistent and repeatable quality. FPI does not do random-sampling pressure tests. All FPI pipe is hydrotested at the plant at up to 1.5 times its design pressure rating.

Further, all FPI pipe utilizes a threaded connection rather than an adhesive/oring joining process to assure a tight, leak-free connection at the highest pressures. This attention to quality assures the operator that his pipe can be quickly installed and the well brought on line without any surprises in the field.

In 2011, a few Bakken operators approached Future Pipe requesting that FPI find a solution to the growing rate of failures that they were experiencing with their existing fiberglass line pipe purchased from others and manufactured with Anhydride or Aliphatic Amine resins.

This failing pipe had been installed for a few years and it was determined that a combination of parameters contributed to the failures, including production temperatures that were increasing over time. Future Pipe conducted extensive testing of various pipe design points, including the use of Aromatic Amine Epoxy Resin in the manufacturing of this special pipe. This combination of specific design points included wall thickness and operating pressure considerations and was presented to these operators for further evaluation in the field. In fact, 144

BAKKEN OIL REPORT â&#x20AC;&#x201C; FALL 2013

one operator chose to perform their own

material that is an E-glass roving made

testing in their lab facility prior to field

up of a multitude of individual filaments,

testing. Field pilot projects were initiated

it is the resin and manufacturing

in 2012 and to date, this pipe is flawlessly

methodology that play the biggest roles

performing at the highest temperatures

in determining mechanical strength. It is

in the industry. These excellent results can be directly attributed to a filament winding manufacturing method (pictured here) that provides greater mechanical strength than a sidewinding

recommended that the operator carefully consider his current project conditions, as well as potential conditions he may experience years in the future. Future

manufacturing method, as well as the

Pipe can assist the operator with technical

premium component in the fiberglass

solutions and field service support

chemistryâ&#x20AC;&#x201D;Aromatic Amine Epoxy Resin.

before, during, and after the project is

Since most fiberglass pipe

commissioned. Contact Future Pipe at

manufacturers use a reinforcement

sales-usa@futurepipe.com. w

Distribution of Montana Oil and Natural Gas Production Tax (Q1 2013) The State of Montana collected and is distributing $55,283,998.66 in production taxes and interest earnings.

The total revenue and distribution: • Revenue: Total Collections: $55,283,998.66 • County Total Distribution: $25,117,416.39 • Guarantee Account: $91,047.73 • State School Oil and Natural Gas Impact Account: $6,503.41 • County School Oil and Natural Gas Impact Fund: $32,517.05 Total $25,247,484.58 State distribution: • Oil, Gas, & Coal Natural Resource Account: $1,102,481.21 • Board of Oil and Gas Conservation: $564,475.72 • Natural Resources Operations Special Revenue Account: $573,065.05 • Natural Resources Projects State Special Revenue Account: $612,782.43 • Orphan Share Account: $836,901.94 • University System: $751,793.26 • General Fund: $25,595,014.47 Total $30,036,514.08 Quick Facts • Amount of gasoline consumed every day in the western U.S. (excluding Alaska): 64.7 million gallons • Amount of diesel fuel consumed every day in the western U.S. (excluding Alaska): 21 million gallons • More than 510,000 jobs in the western United States, with a payroll of more than $27 billion, depend on the petroleum industry.

• Subject to the laws of supply and demand, the price of crude oil accounts for nearly 70 percent of the cost of gasoline. According to the U.S. Energy Information Administration, federal, state and local taxes are the second-largest determinant of gasoline costs, accounting for 13 percent of the price consumers pay at the pump. In fact, combined state and federal taxes add 49.9 cents on average to every gallon of gasoline we pump into our tanks.

Information courtesy of the Montana Petroleum Association: www.montanapetroleum.org.

dakota gasification company

Tap into the future

Dakota Gasification Company, a whollyowned subsidiary of Basin Electric Power Cooperative, is a global leader in carbon capture. Its Great Plains Synfuels Plant has been collecting carbon dioxide from its Rectisol unit since 2000.

Dakota Gas has successfully collected and transported over 20 million metric tons of carbon dioxide for Enhanced Oil Recovery (EOR) to date.

The Great Plains Synfuels Plant is the only commercial-scale coal gasification plant in the United States that manufactures natural gas. Located five miles northwest of Beulah, N.D., the Synfuels Plant has been in operation since 1984. The Synfuels Plant produces approximately 170 million standard cubic feet (mmscf ) of natural gas daily. Other products produced at the plant include anhydrous ammonia, ammonium sulfate, cresylic acid, phenol, krypton/xenon, liquid nitrogen, naphtha and carbon dioxide.

Dakota Gas started collecting and transporting carbon dioxide from its Rectisol unit in 2000. It is the largest carbon dioxide capture project from 146

BAKKEN OIL REPORT – FALL 2013

an industrial source in the world.

Dakota Gas captures carbon dioxide in a gaseous form and compresses the carbon dioxide in three eightstage 20,000-HP compressors. The carbon dioxide exits the compressors in its dense phase (liquid), or super critical phase. The carbon dioxide is then injected in a 205-mile pipeline that extends from the Synfuels Plant in Beulah, N.D., to oil plays in central Saskatchewan. Oil companies inject the carbon dioxide into oil reservoirs for EOR. Carbon dioxide is injected into oil reservoirs in order to pressurize the reservoir and push oil to collection wells.

EOR allows companies to collect 10 to 30 percent more oil than would have otherwise been possible.

Dakota Gas currently transports 150 mmscf per day to oilfields in Canada.

“We currently have additional carbon dioxide available for EOR,” reports Steven Liebelt, marketing manager for Dakota Gas. “Dakota Gas is always looking for new and innovative ways to capture and transport additional carbon dioxide. The

response from oil companies has been very positive and we are glad we can offer a value-enhancing product to help the energy needs of our country.”

“We have carbon dioxide and we would love to expand our development in the United States,” says Paul Quist, market development manager for Dakota Gas. “We are always looking for opportunities, both big and small, to improve energy development in the area. EOR is a great opportunity to take carbon dioxide out of the atmosphere and put it to good use in the oilfields.”

Dakota Gas, a pioneer in capturing carbon dioxide from an industrial source, has carbon dioxide available in the northern plains.

For additional information, please contact Paul Quist at 701-221-4412.

Dakota Gas is a Responsible Care provider and is dedicated to providing products and services for rural communities.

“Tap Into The Future” – call to find out where there is a pipeline tap near you! w

manger insurance

Manger Insurance: insuring the Williston Basin since 1946

By Gloria Taylor

A recent assessment of the Bakken and Three Forks formations in the Williston Basin revealed that these world-class formations contain even greater energy resource potential than ever previously understood, according to the U.S. Geological Survey’s estimate.

Manger Insurance has been there from the start, insuring the Williston Basin since the insurance broker first opened its doors in 1946.

“On January 1st, 1946, Erling Manger, having recently retired as the Williams County North Dakota treasurer, opened the doors of Manger Insurance, Inc. at 120 E. Broadway and began offering insurance to protect businesses and property,” says Brian Sumption, commercial lines agent at Manger Insurance.

“Since 1946, Manger Insurance, Inc. and the Williston Basin, including the Bakken and Three Forks zones, have both grown through the ups and downs that have been experienced in the Williston Basin oilpatch over the past seven decades,” Sumption declares.

In the same year Manger Insurance was established, plans were being made to drill for oil in the area after Amerada Petroleum Corp. acquired leases to the property. It was not the first attempt to drill for oil in the sedimentary deposits—rather one in a string of attempts beginning in the 1920s—but it was to prove fortuitous to future development of the natural resource spanning the deposits in North Dakota, South Dakota, and Montana in the U.S. In 1951, a whole new industry was founded in North Dakota when Leon (Tude) Gordon bottled the first pint of oil, resulting in other oil companies buying up leases on farmland in the area in order to explore. By 1954, a reported 80 percent of the possible oil-producing land was under lease.

Over the following decades, drilling activity and a thriving service industry grew to accommodate work in the Williston Basin, which today is being evaluated for its potential to reduce United States’ reliance on foreign energy sources.

At a time of change in the fall of 1954, Manger Insurance was also growing. The company constructed a new building at 315 1st Ave. W. and expanded in other ways when Carl Oksol purchased a one-half interest in Manger Insurance in December of 1955. Oksol began work with Manger Insurance on Jan. 1, 1956.

148

BAKKEN OIL REPORT – FALL 2013

In January of 1958, Jim Leinen also joined the company, having purchased an interest in Manger Insurance.

In 1961, a major change occurred when the founder retired and sold his remaining interest to Oksol and Leinen. “This partnership lasted until July 31st, 1994, when Carl purchased Jim’s interest,” says Sumption.

In January of 2002, Oksol’s son and daughter, Craig Oksol and Karla Osborn, took over day-to-day management of the agency.

They successfully grew the agency until March of 2010, when due to Oksol’s declining health, Osborn’s son, Rob Osborn, purchased the company. He continues to oversee the ongoing growth of the agency today.

Timely, courteous, professional service Writing commercial insurance for oilfield-related risks, with all the proper and needed coverage, is a daily exercise for the commercial producers and staff of Manger Insurance, Inc., Sumption explains.

The insurance covers a range of personnel and equipment, including welders, pressure testers, truckers, contractors of many types, frac water heaters, drilling consultants, fishing and wire-line companies, rail spurs, work-over rigs, rig movers and more.

Pollution, bodily injury and property damage coverage are routinely written at Manger Insurance, Inc. for above or below-ground sudden and accidental pollution incidents, with broadened property damage options to include the loss of underground resources, says Sumption.

Truckers will find a friendly and professional source of help with MCS90 and BMC-91X filings, commercial auto insurance filings.

Owner-operators have numerous carrier choices.

With all the technicalities involved in underwriting insurance for the complex demands of companies and individuals working in the Williston Basin, good old-fashioned customer service is still top-of-mind for Manger Insurance.

“Timely, courteous and professional service is the commitment of Manger Insurance, Inc. We encourage you to allow us to serve your insurance needs. Manger Insurance, Inc. has been serving our clients’ needs since the very beginning of oil activity in the Williston Basin, including the Bakken and Three Forks formations and benches going all the way back to 1946,” Sumption concludes. w

Protection You Need, A Name You Can Trust.

INDEPENDENT AGENCY SERVING THE WILLISTON AREA SINCE 1945 • • • • •

Oilfield Auto Property Commercial General Liability

511 2nd Street West, Williston, ND 58801 701-572-3786 | mangerins.com

Touchstar group

TouchStar® announces its CrudePac™ XPRESS Bundled…

A fast, low-cost, electronic ticketing system for crude oil and water haulers!

150

TULSA, Oklahoma – TouchStar has

entry cost. Incredibly fast to roll-out

electronically. TouchStar provides

announced its CrudePac™ XPRESS

(typically within 30-days), the highly-

secure hosting of the bundle of services,

Bundled electronic run ticketing system

durable XPRESS comes in a completely

eliminating the cost of purchasing and

specifically designed for crude oil

self-contained, lunch-pail-sized portable

maintaining servers. Even a wireless

and water hauling. Totally compatible

computing kit with absolutely no

communications plan is included. After

with existing, field-proven TouchStar

in-cab installation required! Proven

a one-time setup/master file data-load

Mobility Software Applications such

CrudePac™ Mobility Software and

and training fee, the user’s subsequent

as CrudePac™, this bundled package

eNABLE™ Middleware are included in

cost for the XPRESS Bundled System

provides the perfect solution for crude

the package, as well as the TouchStar

is covered by an extremely affordable

haulers who want to get up-and-

HyperDocs™ Imaging Technology

$220 a month per truck monthly

running quickly, at the lowest possible

that captures all field ticketing data

subscription fee.

BAKKEN OIL REPORT – FALL 2013

Touchstar group

TouchStar provides secure hosting of the bundle of services, eliminating the cost of purchasing and maintaining servers.

To guarantee the durability required for operation of mobile computing equipment in the demanding crude oil and water hauling environments, TouchStar utilizes only industrialgrade hardware in the XPRESS package, such as the rugged Intermec® CN50 handheld computer with scanner and the Intermec® PB51 portable four-inch thermal printer. The bundled kit includes a cigarette lighter adapter for powering both the mobile computer and printer. TouchStar also supports its XPRESS customers with its acclaimed “24/7 Service Plan”.

“Our new XPRESS Bundled significantly reduces start-up time and costs,” says Dave Fredericks, TouchStar sales manager. “For our crude and water hauling customers, we believe it’s the absolute fastest pathway to the lowest fleet automation entry costs, as well as to full-featured electronic ticketing, plus a far quicker return-oninvestment.” For more information on the CrudePac™ XPRESS Bundled, contact TouchStar sales by phone: 1-918-307-180 or email: 2Sales@TouchStarGroup.com.

Zealand and Montreal, Canada. With over two decades of fleet automation experience and over 30,000 successful installations worldwide, TouchStar is a global innovator

in advanced enterprise mobility solutions.

For more corporate details, visit: www.TouchStarGroup.com or call 918-307-7180. w

STRIBUTING

About TouchStar TouchStar develops mobile computing and automated fleet/ workforce software solutions for a broad range of industries, including oil and gas, field services, consumer goods, and transportation/fleet management, across a multinational marketplace. Primary offices encompass mobility software development and applications facilities in Tulsa, Oklahoma and Sydney, Australia, and two sales/ support offices in Auckland, New BAKKEN OIL REPORT – FALL 2013

151

Inland tarp & Liner LLC

Inland Tarp & Liner (ITL™): Advanced Containment Solutions™ Serving the Bakken, Rockies & U.S. oilfield and shale gas plays Supplying U.S. oilfield and shale gas plays with containment solutions requires ongoing R&D, technology transfer and proactive service programs to meet the industry’s diverse specifications by regional plays.

Specifications are ever-changing and driven by multiple factors: state regulatory agencies; producers’ best practices; individual company/human product and installation preferences; worker safety; climate and weather; and ongoing focus for operational costefficiencies.

Inland Tarp & Liner (ITL™) provides service companies and producers with a comprehensive approach: “Advanced Containment Solutions™”. This program encompasses working with explorers and producers, and their service companies, in order to define well-site challenges, applications and solutions.

These challenges and solutions range from well-pad containment and pit liners, impoundments and tanks liners to secondary containment liners and containment system products.

ITL™ offers a diverse inventory of liners to meet specific applications by geographic play: CWPE single scrim, double scrim and specialty liners; LLDPE-R; LLDPE; HDPE; and geotextiles.

Ongoing R&D programs are a primary focus at ITL™. ITL™ has developed a series of CWPE (coated woven polyethylene) liners. These liners are multiple layers thick, and feature double scrim 152

BAKKEN OIL REPORT – FALL 2013

technology with an optional geotextile surface for worker safety. CWPE liners are “stronger and lighter” than traditional products and are designed for crossover applications in multiple plays. Key manufacturing technical data include very high puncture and Mullen Burst values with reduced mass weight.

Specific CWPE liners are manufactured and fabricated for both primary and secondary containment.

Producers and service companies are continually seeking products and installation practices to increase quality, control costs and further protect the environment. For these reasons, factory-fabricated liners with rigid QA/QC procedures are increasing in demand. These liners are customfabricated, reducing costs and material waste with filed seaming. One-piece liners and larger panels also assist with

installation schedules when inclement weather hits.

As part of its technology transfer program, ITL™ works closely with service companies by providing hands-on programs for installation and welding techniques for field welding larger panels. In meeting with producers, technical data comparisons are presented, along with other key considerations such as site prep and subgrade. The following photo illustrates a subgrade with ITL 40X™ liner installed. The subgrade quality required no geotextile underlayment, saving material and labor costs for installation.

Other R&D programs include identifying containment and well-site products that work in tandem with liners in supplying service companies

Inland tarp & Liner LLC

and producers with one-call turnkey containment systems. These products include varying foam profiles deployed with liners for well pad, frac tanks and duck pond containments. Other product lines include engineered walls for impoundment and larger secondary containment. These walls are specifically designed for secondary containment and features: multiple heights to meet or reduce footprints requirements; quick setup and teardown; efficient liner attachment; and walls that are portable and reusable.

Custom tank liners are also designed and fabricated by ITL™. Liner specifications vary based on region, producer, service company and specific tank applications: fresh water; flow back; and treated liquids. ITL™ works closely with customers in defining cost-effective project solutions for

fabrication and installation. ITL™

and other custom project applications.

customer resources include its

The drawing above is an example of

AutoCAD department for tank liners

tank liner project.

Dickinson Location Opening June 2013

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CALL NOW TO MAKE YOUR RESERVATIONS! Value Place Williston 121 Well St. W. Williston, ND 58801 701.774.9120

ValuePlace.com | 800-ValuePlace 154

BAKKEN OIL REPORT – FALL 2013

LIKE US ON

Inland tarp & Liner LLC

ITL™ also offers custom-fabricated insulated floating covers for customers with custom project AutoCAD renderings. These covers are used during winter months to protect liquids from freezing, and in summer months to reduce evaporation. Product applications include above-ground or in-ground impoundment and steel tanks. Covers are installed on liquid surfaces and are also wrapped on the outside of tanks as an insulator.

liners and provide a base covering for equipment and tanks.

ITL™ takes great pride in working closely with service companies and joint collaborative R&D projects. The next photos are of a custom containment product, ITL™ Bear Berm™. The design incorporates encapsulated foam, 10 feet in length, with a wood board insert in the foam for attaching liner. It also features extensions with grommets for anchoring on the perimeter of the well pad.

Recycling liners and reducing the volume of materials dumped in landfills is a common and shared goal by many E&Ps across the industry. ITL™ has been a leader and very pro-active in this area and has identified programs and resources for producers and service companies for multiple plays.

ITL™ U.S. capabilities include East and West Coast fabrication and distribution centers with over 220,000 square feet of manufacturing space. With annual fabrication capacity of over 300 million square feet, ITL™ has a reputation for its rapid turn-around of customfabricated liners in just a few days or the same week. Based on the industry’s tight operation schedules, this rapid turnaround is vital for service companies in responding to producers.

Inland Tarp & Liner (ITL™) has been in business for over 30 years. Its headquarters are located in Moses Lake, Washington.

For further information and assistance, please contact Todd Hoffer at 509-750-6767 (cell) or ITL™ at 800-3467744. Or visit www.inlandtarp.com. w

FEATURES Another unique product is ThermaPad™, a post-industrial waste product converted to foam. It offers multiple well-site applications to protect

Combo Trailer provides 5+ individual services into one call and one invoice Call to book yours today Office | 403.347.2007 Mitch (Sales) | 403-463-5735 Craig (Operator) 403-304-9514

60KW Generator 2000L Fuel Storage Integrated Light Towers Washrooms Garbage Waste Oil Collection OPTIONS Skid Mount | 20’ Office | Medic Larger Fuel Storage Larger Waste Oil Storage Glycol Boiler (no man required)

BAKKEN OIL REPORT – FALL 2013

155

farmers union

Tioga Mega Plaza …

‘Eighth Wonder of North Dakota’!

Farmers Union Oil Company of Stanley and Tioga, now doing business as “Pinnacle”, recently completed construction of its new Tioga Travel Plaza located in Tioga on Highway 40. The gigantic Travel Plaza is designed to be a

one-stop destination for people living and/or working in the Bakken region.

Pinnacle’s new store has a wide range of services for trucking companies, oilfield workers, travelers and local residents, 24 hours per day, seven days per week. The

View our complete inventory at www.noresauto.com

can dream... u o y If

CPS CPS Belly/Side Belly/Side Dumps Dumps

nn iguurraatitioo ffig AAnnyy CCoonn

Any Any size, size, spec, spec, many many in in stock stock

Load Load Trail Trail Goosenecks Goosenecks

...WE CAN BUILD IT! We We can can design design any any custom custom Nore’s

trailer trailer you you can can imagine! imagine!

We also offer

•• Open Open & & Enclosed Enclosed Trailers Trailers •• Bathroom Bathroom -- Shower Shower Trailers Trailers •• Complete Complete line line of of Pickups Pickups & & SUV’s SUV’s •• Semis Semis •• Complete Complete line line of of heavy heavy duty duty trailers trailers •• Specialty Specialty Trailers Trailers

Auto Auto & & Trailer Trailer Sales Sales Take Take advantage advantage of of the the Canadian Canadian exchange exchange rate rate and and save save Kenmare, Kenmare, ND. ND. thousands! We We are are only only 30 30 miles miles south south of of the the border! border!

701-848-6572 701-848-6572 or or 701-848-6571 701-848-6571 thousands!

156

BAKKEN OIL REPORT – FALL 2013

Travel Plaza is unique as it offers goods and services of which most other oil field stores only dream.

The Pinnacle Business Center offers customers a large printer capable of printing full-size blueprints and drawings in color or black and white. Customers can deliver originals to the business center and wait for the copies to be made, or they can send information to be printed via fax: (701) 664-4024 or via email: businesscenter@cenexofstanley.com and pick up the finished copies at their convenience with little travel time. The Pinnacle Business Center suggests you call (701) 664-4022 in advance to let the staff know you are sending information to them so they can process it for you.

The Pinnacle Business Center is where customers will find MoneyGram®, a money-transfer service. It’s all available at Pinnacle’s new Mega Travel Plaza.

Customers can purchase shipping supplies such as boxes, tape, packing material, etc. for shipping via UPS or the U.S. Postal Service. For those working in the Bakken region, these services are just part of the hospitalities the co-op’s megastore delivers.

Don’t have time to wash clothes?

Customers can visit the Pinnacle Business Center, pick up a laundry bag, complete

Farmers Union Oil

We now offer the Carhart Brand of work apparel including their FR line at our new Tioga Travel Plaza.

You can find all your work clothing needs at our Stanley & Tioga locations, which offers a full line of Flame Resistant (FR) work apparel, including Bulwark & Key, also Georgia, John Deere, Baffin and Muck work boots. In our electronics section you can find GPS units, cell phone accessories and headsets, antennas, small flat screen TVs with DVDs, computer notebooks and much more.

We are truly your one-stop shop.

farmers union

an information card, put their dirty laundry into the bag and drop the bag into the huge blue box in front of the building. A local laundry service will pick up the dirty laundry, wash, clean, iron, fold and deliver back to the business center for customers to pick up—job completed!

If your company or office needs a meeting room with adequate space, including the ability to use state-of-theart electronic video equipment, or a place that has the ability to cater food for the participants, the conference room, conveniently located in the front of the Travel Plaza, has it all! Customers will find an 80-inch “smart” TV that utilizes the Internet and a variety of apps; a 47-inch “smart” board that includes a full touchscreen—capabilities that are great for presentations; it’s like having a computer on the wall! The room is also complete with a drop-down projection screen that works well for

PowerPoint presentations or DVR (video) presentations.

The co-op’s executive chef can serve up a quick snack or can offer a full-service menu for your meeting. The conference room has the capacity to seat 50 people for a company meeting or any other type of gathering where you need a private room with the services to match.

To reserve a time and date, or for more information, call Sam (701) 664-4020.

For the customer working in the Bakken region, fire-resistant clothing and other personal protection equipment is a requirement. The Pinnacle Clothing Store, which is located inside the Mega Travel Plaza, carries a wide assortment of name-brands and items such as Carhartt, Wrangler, Dickie, Rasco, Pacific & Maine, as well as Georgia Boot. The shopper will also be tempted with T-shirts from plain to sport or to Dakota-specific. Many gift items are available, as well.

The Home & Hardware department located in the Travel Plaza has what customers need to take care of many project needs. Several years of experience stocking the right items in the Stanley store means locals, oilfield workers, and farmers are likely to find what they need in this new store.

Whether customers are looking for groceries or want to grab something to eat on their way to the next destination, they will find a large selection from which to choose. The new store has made it their mission to have the best oilfield food in the state. Ribs, brisket, sirloin steak, salmon steaks, shrimp, all the fixin’s…. and lots more prepared by a real executive chef! A big breakfast menu offers plenty of items to get the day started right.

Pinnacle’s general manager likes to call the new store the “Eighth Wonder of North Dakota”. Tioga is now officially on the map, with one of the finest hospitality centers in the state! w

TEXAS Building and servicing Hydrostatic TEST TRUCKS

Testing units for over 30 years.

Fully stocked 1 1/4 thru 4 1/2 bar tools

• KMW parts tooling used on all truck locations • Our units are competitively priced and low maintenance

• High Pressure Hoses • Gauges • Valves • Sheaves • Bar Cups • Drag Cups • O-rings • Wireline

Texas Test Trucks Phone: 432.381.8142 Fax: 432.381.3730 Email: kikermachine@aol.com www.kikermachine.com 158

BAKKEN OIL REPORT – FALL 2013

Conleymax

ConleyMax: flameless heating systems for the Bakken

In Gaelic, the traditional language of Ireland, Conley means “purified fire”.

In North America, ConleyMax Energy Inc. means patent-pending flameless heating systems capable of heating liquids, air, structures and equipment.

ConleyMax was established in 2011 by two seasoned businessmen—Kevin Baker, an oilpatch entrepreneur and CEO, and Patrick Bell, an engineer with considerable exploration and production experience—who had previously founded Century Oilfield Services Inc., a successful fracturing services company sold to Calfrac Well Services Ltd. in 2009.

“Traditional flame equipment has distance restrictions, but our flameless heating units can be placed in direct proximity to rig equipment,” explains Patrick Bell, president and COO of ConleyMax. “Our heaters, which are more than 90 percent efficient, have a number of builtin safety features, such as positive air

shut-offs, secondary fluid containment and brushless alternators.” Bell continues, “They are powered by Tier 3 John Deere diesel engines and are easily towed behind a standard pickup truck, making them portable enough to be placed directly where heat is needed.”

ConleyMax, which operates over 150 heaters, has two divisions: rentals (air and air/glycol heaters) and service (fluid heaters). ConleyMax heating units can easily be identified by their appealing Emerald Isle green color.

The ConleyMax Rentals Division offers three different sizes of air heaters, as well as combination air/glycol heaters.

Features of the MC-710 air/glycol combination unit, ConleyMax’s most popular unit, include: • 700,000 BTU heater.

• Can be operated as air only, glycol hose loop only, or can run both simultaneously.

• Air flow is up to 5,000 CFM.

• Minimum 26-hour run-time.

• 150-gallon (568-liter) fuel capacity.

• Forklift pockets and removable trailer.

• Lifting crane eyes make it helicoptertransportable.

• Multiple safety protection systems.

• Glycol lines that can be adjusted up to 400 feet.

Fast and Easy Set-up Site set-up is fast and easy. “A cylinder-style heat exchanger is lowered into the rig tank. The 1.5-inch flexible hose is a quick connect to the glycol loop. Also of note, the air duct can be directed to the BOP or wherever heat is required. It’s an electric control panel and a diesel engine. Turn a key, set a temperature and you’re heating!” says Bell.

“On a tank, we bolt on a heat exchanger through a four-inch valve and quick-couple the glycol loop onto BAKKEN OIL REPORT – FALL 2013

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the heat exchanger. These heaters can be run in sequence, with one unit heating through four tanks.”

Capable of heating air and glycol to varying degrees at the same time, the revolutionary ConleyMax system has the ability to arrange heating coils and tank inserts in various configurations. Consultants often have specific lease layouts and with their quick-couple system, ConleyMax can adjust to this and provide heat to tanks, lines or equipment. The unit, after set-up, is designed to run without an operator, eliminating personnel costs such as subsistence, room charges, and wages.

This unique configuration often allows the opportunity to utilize the MC-710 air/glycol unit to satisfy portable industrial boiler applications. This can eliminate the costs of boilercertified operators and of having to bring in water or chemicals.

The dry air, heat and closed-loop glycol system can thaw frozen equipment without creating frozen puddles (a typical by-product of using boilers and steam equipment), thereby eliminating slip-and-fall hazards when puddles turn to ice.

The MA-700 air heater, which has many of the same safety and system protection features as the MC-710 combo unit, is a flameless, air-only unit that generates clean, dry airflow without any fumes or exhaust in the airstream. In addition to oil and gas applications, it can be utilized in many other industries. For example, these heaters are ideal for providing building heat for new construction, heat for disaster recovery or floods, and eliminating pest infestations such as bed bugs.

ConleyMax Inc.’s larger equipment is part of its services division. This department includes fluid heaters, such as the MW5100, which are ideal for heating and maintaining temperatures of individual and C-Ring mass volume tanks.

Some features of the MW-5100 fluid heater are: • Pumping capacity of 650 gallons per minute (2.46 cubic meters per minute).

• 720-gallon (2,765-liter) fuel tank with 28 gallons (106 liters) per hour of fuel consumption.

• Flameless operation allows continuous heating while other operations occur (i.e., fracking operations).

Efficiently & Effectively Again, site set-up is quick and easy. “You can rig in one or multiple units. With the self-priming pump, you can pump from creeks or lakes; no purge is required. You can pump over three miles, depending on the elevation,” Bell says.

The biggest competitive advantage that ConleyMax has with its fluid heaters is the ability to assign a “suite” of units to a project. The number of units working on a heating job can be easily adjusted to suit on-site conditions, such as changing weather or other issues that may cause project delays. In constant communication with the customer, they have the 160

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ability to add or remove fluid-heating units to adapt their service to the changing requirements of a job, ensuring that projects run smoothly.

In addition to oilfield fracture stimulation water heating, this unit is ideal for fluid tank farms, mining operations and for preheating for plant start-ups. The unique ability to directly heat “product” through the MW-5100 unit (a 14°F increase per pass) also allows for unique in-line heating applications.

“We listen to our customers and are always open to new heating challenges,” says Bell. “We have an open mind to growth and product-line expansion. We can build or create customized heaters or inserts. We’ll do whatever we can to remedy our customers’ heating/freezing concerns.”

With service locations throughout the northeast U.S. and western Canada, the smaller air and air/glycol heating equipment can be delivered to site by company personnel, or picked up directly by the customer (all units are wheeled and can be towed by a pickup truck no larger than one ton). Larger fluid heaters, also wheeled, are prepared and delivered by company staff. Customers need only call 701-577-HEAT (4328) to speak with Robert Tumbach, U.S. sales manager, or 701-5807415 to reach John Ladue, operations manager based out of ConleyMax’s shop in Williston, N.D. The “purified fire” heaters from ConleyMax get the job done safely, efficiently and cost-effectively. w

flameless

heating systems

ConleyMax provides flameless heat capable of heating liquids, air, structures, and equipment. Our heaters are the most efficient and safe available and utilize the latest technology.

The equipment is simple to operate and very reliable.

All units have several built in safety features. These include: positive air shut offs, secondary containment, flameless technology, and brushless alternators.

Toll Free: 1.855.573.HEAT (4328) getheat@conleymax.com www.conleymax.com

ConleyMax Energy Inc. 14233 Hwy 2 Williston, ND - 58901 Ph: 701.577.HEAT (4328) Fax: 855.301.8653

Wilco Machine & Fab Introduces the Quickstand Portable Frac Sand Silo ™

Manufacturers of fabricated & machined equipment, products & tools for the worldwide energy industry.

for proppant, sand or granular material

• Rapid deployment with vertical orientation • Transports empty and is filled at work site • Works with Quickstand trailer for fast and easy transport and setup • Superior flexibility for tight workspaces. Quickstand trailer is attachable on three sides to provide greater flexibilty in confined worksites.

Left, right or center unload chute orientation possible

Sales & Customer Support Contact: Anthony Chandler anthony.chandler @wilcofab.com Larry Wortham larry.wortham @wilcofab.com 1326 S. Broadway Marlow, OK 73055 Phone: 580-658-6993 Fax: 580-658-6767

www.wilcofab.com

Patent(s) Pending

wilco machine & fab

Wilco Frac Sand Silo

Quickstand Portable Silo for proppant, sand or granular material Quickstand Advantage: • Minimize and manage investment by using one detachable trailer to transport multiple silos.

• Return on investment: Quickstand silos can return the full capital cost in five years on fuel savings, alone, compared to traditional diesel-powered horizontal equipment.

• Lease option available (OAC).

• Reduced operating cost: * Virtually eliminates operating costs by utilizing solar power and gravity unloading. * Quickstand silo has zero daily maintenance and lubrication requirements for minimal maintenance costs. * Eliminates pilot vehicle costs in many regions with optimized transport dimensions. * No expensive crane or deck truck requirements further reduce transport costs.

• Environmental responsibility: * Vertical silo orientation reduces worksite footprint and environmental impact when compared to horizontal storage equipment. * Zero operating emissions from gravity unloading and solar power for control systems. * Quiet operation without the noise pollution generated by diesel-powered systems.

• Ground bearing pressure: 1.5 psi (empty silo), 15 psi (fully loaded).

• Ground bearing pressure: 1.8 psi (empty silo), 18.0 psi (fully loaded).

• Clamshell type gates: high-capacity, low maintenance.

• Four-inch pneumatic fill pipes and optional top-fill loading capability.

• Deadhead product deflectors for high flow rate, low production degradation, reduced dust, long life, and even product distribution.

• Critical wear parts feature external access bolt in replacement.

• Synthetic bushings throughout for low-maintenance requirements.

• Unload rate over 20,000 pounds/min (200 sacks/min).

Features: • Vertical silo stores more proppant in less space.

• Gravity unloading: no engine or conveyor.

• No daily maintenance.

• Quiet and emission-free operation.

• Manual gate override. In an emergency, the gates can be operated manually.

• Loadcells and digital display for self-weighing of product.

• Electric actuators for gates and unload spout can be adapted easily for remote control operation while maintaining manual override capability.

• Exclusive side delivery unload chute draws product from silo center, maintaining silo stability and safety.

• Patent pending low center-of-gravity design for stability and reduced lifting loads.

Safety Features: • Eliminates hot fueling of running equipment.

• Internal dust suppression design with optional external dust collection on silo vent.

• Minimized confined space exposure with many externally accessible parts.

• Stabilizers increase empty wind-load rating.

• Base-equipped with full LED lighting package, including amber strobe lights.

Quickstand Solar Electric: Clean, Quiet, Always Ready: • Solar-electric power system.

• Designed to operate without sunlight for several days at normal use.

• Digital charge controller with LCD display.

• All operating circuits feature resettable breaker protection.

• LED task lighting with adjustable, automatic shut-off timers.

Options: • Dust suppression on silo vent.

• Conveyor loading with remote-operated rooftop hatch.

• Paint color and specifications.

• Decal package.

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wilco machine & fab

Compact Storage:

2,860 cubic feet (small compartment:

100 percent fill; large compartment:

With a typical single or dual

508 cubic feet at 110 lb/cubic foot

2,815 cubic feet at 110 lb/cubic foot

conveyor, customers can place up to

100 percent fill; large compartment:

feet 100 percent fill).

1,440 tons of proppant on less than

2,350 cubic feet at 110 lb/cubic foot

1,900 square feet.

100 percent fill).

Wilco is expanding the Quickstand

• 182-ton dual compartment silo: Specifications: Summit 4C 4-625x7

3,320 cubic feet (small compartment: 1 8/19/2013 9:18:50 AM

Island 1-2 ad PRINT 081913.pdf

• 143-ton dual compartment silo:

505 cubic feet at 110 lb/cubic foot

line of products to give our customers enhanced functionality and use of the Quickstand trailer. This technology can be applied to many other bulk-storage products which

Reach for the SUMMIT in ESP solutions

benefit from the reduced footprint advantages of vertical orientation: • Dry bulk silos and tanks.

• Fluid tanks.

— — — — —

• Vessels for dry powder storage or

Extreme Service Focused ESP Experience Advanced ESP Technology Remote Monitor & Control Custom Solutions

fluids. © 2013 Wilco Machine & Fabrication w

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918.392.7820 432.563.7040 307.764.6346

Career Opportunities @ www.Summitesp.com 164

BAKKEN OIL REPORT – FALL 2013

XNLV46431

EASTERN AREA SOUTHERN AREA WESTERN AREA

mitchell’s oil field service

Mitchell’s grows with the communities it serves Once upon a time in 1977, three men by the names of Everett Mitchell, Eddie Mansheim and Duane Mitchell decided, after years of working for someone else, that it was time to go out on their own. So with a wobble backhoe, two worn-out trucks and a couple of pickups, they started Mitchell’s Oil Field Service and began working in Sidney for Shell Oil. In the very early days, there were about 12 workers; by the end of 1980, there were about 100 employees. When the boom went bust in the fall of 1982, they maintained between 30 to 45 employees for eight to 10 years.

Fast-forward to the present: the magnificent growth in the Bakken oil industry has greatly benefited Mitchell’s Oil Field Service. There has been an extreme amount of growth in the Killdeer, N.D., area, resulting in a tripling of Mitchell’s workforce and equipment. A carpenter division was added in August 2013, and Mitchell’s now has the ability to construct treater houses, meter houses, and insulate storage tanks and facility pipelines.

The rig-movers have nearly doubled as well, with most of the growth occurring in Glendive, Montana, due to additional available housing. Mitchell’s provides customers with roustabouts crews, contract pumpers, pipe-line construction workers, winch trucks, bed trucks, haul trucks, cranes, cherrypickers, steamers, painting crews, well-site supervisors, carpenter crews and redi-mix service in southeastern Montana and southwestern North Dakota.

aeAdding to its experienced roustabout crews and providing the most up-todate equipment possible, Mitchell’s has grown from 200-plus to more than 400 hard-working employees throughout the Williston Basin.

Sidney-based Mitchell’s has three locations in Montana, including Baker and Glendive, and four in North Dakota—Bowman, Killdeer, Watford City and Williston—that provide superior service and a wide variety of equipment. While its main duty is to provide roustabouts for oil companies, this construction and trucking company serving the Williston Basin, Cedar Creek Anticline and the Buffalo Field in South Dakota offers many other services. Experienced employees operate trucks to haul heavy rigs, cranes, and Mitchell’s also employs paint crews and contract pumpers.

Mitchell’s is constantly updating, maintaining, replacing and improving equipment—a never-ending process.

Safety is always a top priority at Mitchell’s. The safety department has more than doubled, conducting more than 10,000 hours of safety training

on all aspects pertaining to the oil industry. Currently Mitchell’s has a Total Recordable Incidents of 1.34.

Administration staff has grown as well in Sidney, Baker, Bowman, Killdeer and Williston. These hard-working employees address the financial end of the business in the accounts payable and accounts receivable departments.

The HR department takes care of payroll and employee benefits. “We can’t work without them,” says Duane Mitchell, vice-president of marketing and development.

As a community-minded company, Mitchell’s has supported local activities for many years, donating money to local schools and community organizations from Buffalo, S.D., to Crosby, N.D. Employees support raising awareness for various causes, by supporting the “Tough Enough to Wear Pink” events at county fairs, purchasing 4-H animals, attending and donating to Relay for Life, area rodeos and sporting events.

“We are community-minded,” Mitchell states. “And we want to grow with the communities in which we do business. We are willing to help, to BAKKEN OIL REPORT – FALL 2013

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mitchell’s oil field service

Marathon Oil, Nabors, Oasis, Oneok, OXY, SM Energy, Stat Oil & Gas, Triangle, XTO and Zenergy.

Since 1977, Mitchell’s Oil Field Service has built a business and reputation on honest service and character. That’s 34 years that Mitchell’s employees have provide ideas and solutions to address

oil transmission and water disposal

stood on Proverbs 11:3 as its company

clients’ situations.”

pipelines, thus broadening the services

foundation as they strive to deliver the

Last year, Mitchell’s joined forces

offered to oil and gas customers in the

finest service available in the region.

with SK&S Oilfield Service, which has

Williston Basin.

(Proverb 11:3 has been the company

been in the Williston Basin oil and gas

“We are looking forward to the future

motto since it was founded: “The integrity

industry since 1981. Kelly and Corey

growth of the energy development

of the upright shall guide them.”)

Everson have brought together a

in eastern Montana. We are positive

“Everett and I have always believed

very good group of employees that

that the drilling is coming back to that

you get what you give; therefore do the

provide experienced roustabout and

region,” Mitchell says.

best for a fair price, and always treat

pipeline crews along with updated

Mitchell’s works with all the major oil

others the same way or better than you

equipment to serve the oil and gas

and gas companies in the Williston Basin

want to be treated,” Mitchell states.

industry. Specializing in pipeline

including Conoco Phillips, Continental

Visit www.mitchellsoilfield.com and

construction, Mitchell’s and SK&S can

Resources, Denbury, Encore, Enerplus,

check out the video to learn more about

now concentrate on gas gathering,

EOG Resources, Hess, Kodiak Oil & Gas,

what Mitchell’s Oil Field Service can do

for you!

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BAKKEN OIL REPORT – FALL 2013

Check us out online at

www.mitchellsoilfield.com build it, fix it, lift it, haul it...

MITCHELL’S IS A GREAT PLACE TO WORK! Roustabout Crews • Winch Trucks • Cranes • Cherry Pickers Wellsite Supervision • Contract pumping • Treaterhouse Construction Steamers • Pipeline Construction

w

ONE NATION UNDER GOD

sund manufacturing

Sund Manufacturing:

Complete turnkey services built locally in the Bakken region

Since 1939, Sund Manufacturing has a proud history of manufacturing quality equipment. This fourth-generation familyowned business began as an agricultural equipment manufacturer, and for decades has shipped equipment all over the globe.

Located 50 miles northeast of Minot, N.D., Sund Manufacturing has evolved to include fabrication of a wide variety of oilfield products. “It just made perfect sense,” says Lloyd Sund, vice-president of the company. “Here we are positioned right on the edge of the oilpatch. With all of the oil activity surrounding us and all of our manufacturing experience tailor-made for that type of fabrication, it was completely natural to transition into producing products for the oilfield.” Since then, Sund Manufacturing has supplied equipment to some of the largest companies in the Bakken.

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Some of the products Sund Manufacturing supplies include: • Treater packages • LACT Units • Salt-water pump buildings • Electrical buildings on skids • Launchers/receivers • Test manifolds • Pipe stands • Three-sided catch tanks • Portable office and lab buildings on skids “Before some of our clients came to us, they were having a lot of their equipment built on large steel skids and shipped in from out-of-state,” Sund says. “Shipping this type of equipment in from long distances was leading to some big challenges. Once they found out that we could do it right here at Sund Manufacturing, and do it well,

it was a perfect solution for them to partner with us.

“They really appreciate the flexible and personal way we operate. If they have design changes that need to be made, the changes can be completed at our manufacturing facility in no time. And clients can work with us personally on the changes, rather than trying to do it over the phone, via the Internet or flying out to the manufacturing site.”

Oil companies were looking for a solution to these problems when they found Sund Manufacturing. “What we have found is that our customers come to us looking primarily for ways to save time and money, while still focusing on receiving quality products. Once they

sund manufacturing

work with us, they realize they get more than that. They are impressed by the quality of people we have and the work we provide. We are family-owned and we always try to focus on the relationship with the client—not just the project.”

From the experienced/certified welding team to the pipefitters, carpenters and electricians, Sund Manufacturing ensures quality attention and inspection from start to finish.

Sund Manufacturing shows a strong sense of loyalty and pride to their community and their employees. In an area where there are so many job opportunities, it is a huge point of pride that the company has so many long-tenured employees and extremely low turn-over. “We like to think that means we are doing things the right way,” Sund comments.

Suppliers are another important piece of the relationship philosophy. Sund Manufacturing works with the largest suppliers in the region and realizes that without quality parts, it is impossible to supply quality products. In an industry where plans change every day—if not every hour—it is critical to have a good supply chain in place. Rush orders, change orders, cancellations, and schedule changes all get easier when the suppliers are part of a team and not just part of a project.

With 60,000 square feet of manufacturing shop space positioned on 10 acres, most people wouldn’t call Sund a “small” operation. First-time visitors often comment that they are surprised that this kind of facility exists in small town North Dakota. However, it is important to Sund Manufacturing to stay true to their history and to keep an element of agility and flexibility that smaller operations often benefit from. It is this very agility that has allowed Sund Manufacturing to successfully navigate the complicated process of taking a customer’s idea

from prototype to production. “One

Sund Manufacturing looks forward

of the things we have always told our

to continuing their long-standing

customers is, ‘If you can sketch it, we can built it’,” Sund adds. “A customer comes to us with a drawing, and we work with them all the way through

reputation for quality work, versatility, and competitive pricing to all of their present and future partners.

until the sketch is built and shaped into

Built to order. Made to last. Sund

the equipment they envisioned.”

Manufacturing. w

701-272-6161 800-334-7863

➤ Separators, Launchers/Receivers, LACT Units, Treater Packages ➤ Saltwater Pump Buildings ➤ Electrical buildings on skids ➤ Certified Pipe Welders ➤ Custom Fabrication ➤ Complete Turn-Key Services

www.sundmfg.com BAKKEN OIL REPORT – FALL 2013

169

mac, Inc.

MAC, Inc. expands its product line once again!

MAC, Inc., in business for three decades, continues to evolve and grow with their clients’ needs and demands. In 1983, MAC, Inc. started a production facility in Glenburn, N.D. As many of their clients in the Bakken oilfield already know, this area of North Dakota can produce some of the most extreme temperature variations. The extremes in temperature prove the resilience of MAC’s products and technology and have become a great testing ground on which to prove their products.

MAC has listened to their clients’ needs from the beginning, setting the company apart from competitors. eeMAC expanded its facilities in 2010 by purchasing a building in Bismarck, N.D., which is where their corporate headquarters are located, along with a top-notch assembly line. This new facility now allows MAC to produce heaters more rapidly and efficiently in order to meet and capture the demands of the various industries they serve.

MAC is known for some of the safest, most reliable and easyto-operate heaters in the industry, and has a wide range of heaters to fit most every need. The MAC line of heaters provide a safe, reliable heat source for any situation where heat is needed for personnel quarters, equipment warm-ups, water flooding stations, mining, pipeline construction, airlines, warehouse and supply depots, loading docks, construction heating, maintenance or mechanic shop heating, paint and coatings applications, dehumidification—the list goes on. All MAC heaters are portable and can be moved to the locations where heat is needed.

MAC has listened to their clients’ needs from the beginning, setting the company apart from competitors. MAC takes pride in engineering the best-quality products, and will take the extra steps to ensure that there will be no breakdowns in the field causing lost production and revenue.

MAC is very excited about the new and innovative heater designs they recently launched. Most importantly, MAC listened to the voice of their customers before starting design. MAC has designed the most accessible service and maintenance doors 170

BAKKEN OIL REPORT – FALL 2013

on the flameless and hydronic heaters. MAC has designed in full secondary fluid containment and incorporated the most innovative and technologically advanced controls in the market today into most of their product line.

MAC also has a manufacturing services division to aid their customers with custom manufacturing needs from fracturing tanks, oil production tanks, satellite trailers, single-axle trailers, and tandem-axle gooseneck trailers to tandem axle generator trailers and much, much more. If you have custom manufacturing needs, contact MAC today. MAC can fabricate most anything and they have a top-notch team of engineers, welders, fabricators and painters. MAC also has a large paint and powder-coating system for your project needs.

MAC is North Dakota-born, North Dakota-based and is here to stay for another 30 years to service the Bakken and many other regions around the globe.

Contact MAC today for all your heating or custom-manufacturing needs: MAC, Inc. 2106 East Indiana Ave., Bismarck, North Dakota, U.S.A. 58504 Toll free: 1-800-272-4604, sales@macheaters.com • www.macheaters.com w

• 6,000 square feet of coverage.

• Non-toxic, environmentally friendly HTF. • Full 110 percent fluid containment.

• Fuel-efficient mixing technology (patent pending).

MAC launches a new product this year: the MAC 6000 Hydronic surface heater.

• Temperature output range: 65oF – 185oF. • Designed for serviceability.

• Standard “off the shelf” ground hose.

• Rear roll-up aluminum door with LED lights.

• Manufactured in the U.S.A.

MAC, Inc. provides 30 years of experience in the heating industry.

The NEW MAC 6000 Hydronic surface heater capable of 6,000 Sq Ft of coverage.

Clean, Safe and reliable Indirect Fired Heaters ranging in size from 210,000 BTU’s/Hour to 4,200,000 BTU’s/Hour

Clean, safe and reliable Flameless Heaters ranging in size from 550,000 BTU’s/Hour to 1,250,000 BTU’s/Hour

MAC, Inc

2106 East Indiana Ave., Bismarck, ND 58504

+1.800.272.4604

norris production solutions

Norris Production Solutions (NPS) expands automation capabilities with acquisition of SPIRIT Global Energy Solutions®

THE WOODLANDS, TX – Norris Production Solutions

Norris Production Solutions (NPS), based in The Woodlands,

(NPS), a global leader of artificial lift and surface production

TX, is a Dover Corporation operating unit in Dover’s Energy

equipment and an operating unit within the energy segment

segment. NPS provides integrated solutions across the artificial

of Dover Corporation (NYSE: DOV), proudly announced

lift spectrum for the oil and gas industry, delivering the latest

September 26th that it has acquired SPIRIT Global Energy

technologies, innovations, and solutions in rod lifts, progressing

Solutions® (SPIRIT), based in Midland, Texas.

cavity pumps, sucker rod pumps, gas lift, plunger lift, as well

“We are thrilled with the acquisition of SPIRIT since it allows NPS to offer its customers an increased selection of premium products and services within the artificial lift systems segment,” said Dan Newman, NPS president. “SPIRIT’s focus on research, innovation, and well automation greatly enhances the value of the entire NPS portfolio.”

Founded in 2008, SPIRIT delivers innovative artificial lift tools and technology to oil and gas producers around the globe. The company develops production optimization solutions for rod-pumped wells and offers industry-leading training in rod pumping and pump-off control technology.

“We are excited to join Norris Production Solutions,” said Matt Raglin, founder and VP/managing director of SPIRIT. “NPS affords SPIRIT new opportunities for continued learning and growth and fosters increased opportunities for improved products and services. The many synergies between SPIRIT and NPS will allow us to offer a full and comprehensive range of solutions for our customers and enhanced career opportunities for our employees.”

For more information on Norris Production Solutions, please visit www.npsdover.com.

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BAKKEN OIL REPORT – FALL 2013

as related equipment, well site controls, analytic tools and customer-centric training and educational programs. Additional information is available on the company’s website at www. npsdover.com.

For further information, contact: Dinah Kumbera, Marketing Norris Production Solutions (281) 403-5719 or dkumbera@npsdover.com w

We are thrilled with the acquisition of SPIRIT since it allows NPS to offer its customers an increased selection of premium products and services within the artificial lift systems segment.

oil lift technology

Oil Lift Technology introduces Dual Ram 5,000 PSI Rod Lock©

New Rod Lock is designed to withstand highpressure kickbacks, improve overall safety September 30, 2013 – Oil Lift Technology, Inc., leading designer and manufacturer of progressing cavity pump products within the artificial lift systems market and part of Norris Production Solutions (NPS), is proud to announce the addition of its new Dual Ram 5,000 PSI Rod Lock© BOP to its growing line of progressing cavity pumping equipment.

The Dual Ram 5,000 PSI Rod Lock BOP with incorporated blind ram is specifically engineered for rod-pump applications subject to fracking pressures from nearby fracking wells, and provides this emerging market segment a tool to easily close off wells for streamlined and safe servicing. In addition, its enhanced PSI rating also enables the Rod Lock to withstand the high-pressure kickbacks that are common to shale oil and coal bed methane gas production environments.

The Dual Ram 5,000 PSI features two separate sets of well-closing rams. The first uses Oil Lift’s patented Rod Lock design, which has the ability to hold 25,000 pounds of rod weight and prevent torsional rotation to 1,000 foot-pounds; the second is a blind ram with the ability to seal the well when a polished rod is not present.

Certified to seal well-bore pressures to a maximum of 5,000 PSI, which is 2,000 PSI higher than any other Oil Lift Rod Lock to date, the new technology makes it possible for PC pumps to be safely added to wells that consistently face high-pressure conditions. This allows well owners to save on the labor and equipment costs associated with pump installation and maintenance, and reduces the risk of worker injury and environmental contamination.

For more on Oil Lift Technology, please visit www. npsdover.com/oillifttechnology.

Oil Lift Technology is one of the world’s leading manufacturers of artificial lift systems for the oil and gas industry and specializes in progressing cavity pump systems. Oil Lift has field service facilities in Canada, the United States, Australia, Colombia and Oman and has manufacturing facilities in Calgary, Canada and Brisbane, Australia. Oil Lift Technology –

Certified to seal well-bore pressures to a maximum of 5,000 PSI, which is 2,000 PSI higher than any other Oil Lift Rod Lock to date. headquartered in Calgary, Canada – is a member of Dover Corporation’s Norris Production Solutions (NPS). For more information on Oil Lift Technology or NPS, please go to www. npsdover.com/oillifttechnology or www.npsdover.com.

For further information, contact: Dinah Kumbera, Marketing Norris Production Solutions / Oil Lift Technology (281) 403-5719 or dkumbera@npsdover.com w BAKKEN OIL REPORT – FALL 2013

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Precision Drilling Corporation........................................27

A-1 Evans Septic Tank Service........................................60

Haws Corporation..........................................................15

ACL Combustion Inc.......................................................19

Hess Corporation............................................................51

Presto Geosystems.......................................................103

Ae2s Water Solutions...................................................124

Hotsy Equipment.........................................................110

QMC Hydraulic Cranes....................................................37

Allstate Peterbilt of Williston..........................................25

Inland Tarp & Liner.......................................................153

Alutiq Oilfield Solutions LLC...........................................24

Jasper Engineering & Equipment Co...............................89

Quality Mat Company......................................................7

AmeriTest Inc. ...............................................................65

Keltek Safety..................................................................91

Arctic Oilfield Services....................................................77

KLJ...............................................................................125

Aspen Air Corporation....................................................88

Larson Electronics........................................................111

Atigun Inc. .....................................................................73

Legacy Oil + Gas Inc.......................................................14

Reynolds French & Company........................................112

AVI Rocky Mountain.....................................................100

Legacy Steel Buildings...................................................38

Richland Pump Supply.................................................164

Baranko Bros. Inc...........................................................49

Logan International Inc..................................................21

Riley Bros Construction..................................................32

Beaver Creek Archaeology............................................135

Lower Yellowstone Rural Electric Assn. Inc.....................20

Rocky Mountain Rod......................................................90

Blue Cross Blue Shield of North Dakota..........................13

Lufkin.............................................................................39

Rossco Crane and Rigging Inc. .......................................67

Border States Electric (BSE)..........................................117

Lynden...........................................................................23

Breitling Energy Companies...........................................84

M Space Housing............................................................80

Sioux Steel Company......................................................63

Cambridge House International Inc. ..............................41

MAC, Inc.......................................................................171

CanElson Drilling Inc......................................................33

Manger Insurance........................................................149

Capital Lodge...............................................................141

MBI Energy Services.............................................121, 123

Childs Geoscience Inc...................................................109

MDU Resources Group, Inc................................................5

Summit ESP.................................................................164

Compass Compression.................................................137

Mi-T-M Corporation..................................................... OBC

Sund Manufacturing....................................................169

ConleyMax...................................................................161

Mid-Plains Distributing................................................151

Synergy Station..............................................................69

Crowley Fleck PLLP Attorneys......................................129

Millennium Directional Services..................................115

Texas Test Trucks...........................................................158

Dakota Gasification Company......................................147

Miller Architects & Builders............................................87

Thawzall........................................................................97

Dakotaland Lodging.....................................................118

Miller Insulation Co., Inc.................................................10

The Modern Group / Dragon Products............................56

Dan’s Tire Service............................................................71

Mitchell’s Oil Field Service............................................167

Diamond B Oilfield Trucking, Inc..................................105

MonDak Portables, LLC................................................128

Tire Hotline..................................................................140

EideBailly LLP...................................................................4

Monster Energy Rentals...............................................155

Enbridge.......................................................................IBC

Montana Energy............................................................47

Enerplus.........................................................................59

Motion Industries.........................................................131

Essential Coil Well Service............................................119

Mountainview Energy Ltd..............................................35

Ulterra............................................................................74

Farmers Union Oil........................................................157

MRC Global Inc.................................................................9

Unit Liner Company.......................................................46

Ferguson Waterworks......................................................6

Mvtl Laboratories, Inc..................................................45

Value Place Williston....................................................154

FINN Equipment...........................................................113

Nabors Well Services......................................................17

Vehicle Mounted Air Compressors..................................99

FR Depot......................................................................126

Neset Consulting Service................................................26

VEIT USA......................................................................139

Franz Construction Inc....................................................20

Nexus Secuity Solutions.................................................38 Nore’s Auto & Trailer Sales............................................156

Vision Oil Tools.............................................................133

Frontier Energy Group, Inc..............................................75 Future Pipe Industries..................................................143

PCI Manufacturing.......................................................114

General Equipment & Supplies, Inc................................16

PCS Brokers LLC............................................................107

Glacier Oilfield Services................................................133

Petroleum Services......................................................127

Graham Construction.....................................................36

Phillips & Jordan..........................................................136

Whiting Petroleum Corporation....................................IFC

Grand International.....................................................137

Portadam Inc.................................................................31

Wilco Machine & Fab....................................................164

Gravel Products, Inc. ......................................................61

Portal Service Company...............................................142

Xylem, Inc......................................................................12

H. & L. Rentals and Well Service.....................................70

PowerFuels..................................................................145

Z&S Dust Control............................................................43

R & R Contracting...........................................................79 Rapid City Developement..............................................93 Resirkulere USA..............................................................55

Southern Glove, Inc........................................................92 Spartan Mat...................................................................81 Steamboat Energy Group.............................................119

Titan Machinery.............................................................95 TouchStar Group...............................................................3 Towmaster...................................................................166

Wanzek Construction, Inc...............................................11 Warrior Energy Services.................................................29 Westcon Incorporated..................................................105

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174

BAKKEN OIL REPORT – FALL 2013

WHERE ENERGY MEETS DELIVERY Enbridge and the Bakken Pipeline are leading the way in energy delivery.

Enbridge’s Bakken Expansion Program placed into service in March 2013 will transport 145,000 barrels of Bakken crude oil every day, so it can be refined into the products we rely on. From asphalt to jet fuel, to gasoline and plastic, the oil we transport safely and reliably helps keep North America running strong.

Enbridge delivers more than the energy you count on. We deliver on our promise to help make communities better places to live. It’s part of the reason we were named one of the Global 100 Most Sustainable Corporations in the World.

FIND OUT MORE EnbridgeUS.com